2019 to 2024·Beginner
In short
Disney launched Disney+ in 2019, betting on direct-to-consumer streaming. It bled money through 2022 as content spend outran revenue, then reached streaming profitability in 2024 by raising prices, adding an ad tier, and cracking down on password sharing.
How does a legacy media giant respond to Netflix? Disney chose to go direct-to-consumer rather than keep selling its library to Netflix. That is a market-entry and business-model choice, the kind of decision consultants frame.
Disney+ launched at $6.99 with the back catalogue plus new originals. The theory: a low entry price would drive sign-ups, and the cost of content would amortise as subscribers grew.
Streaming losses mounted as content spend outran subscription revenue, peaking in 2022. Investors questioned the unit economics: how much does a subscriber cost to win, and how much do they pay back over time?
Bob Iger returned as CEO in late 2022 and prioritised profitability: price rises, an ad-supported tier, a password-sharing crackdown, and cost cuts. Streaming turned a profit in 2024.
This is classic strategy. Define the moat (the IP), choose the business model (DTC), then iterate on unit economics (ARPU, churn, acquisition cost). Profitability came from the levers you would model in a case interview.
Consulting
This is corporate strategy. It is exactly the kind of case you would structure in an interview: market entry, business model, and unit economics.
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