For over a year now, Disney CEO Bob Iger has been working to invest more heavily in the online space to cultivate engagement and build loyalty among users.
More recently, he announced Disney’s plans to charge for content online. The Mouse House is currently exploring a subscription model that would allow the company to assess users a monthly fee in exchange for content on a new website it’s developing. Iger explained that the pay-for-play site will offer users a “robust” membership experience similar to Disney’s popular kids’ sites Club Penguin and Pixie Hollow.
Furthermore, the fact that Disney already charges for its content via Apple’s iTunes has led to a lot of questions – after all, the company’s close relationship with Apple CEO Steve Jobs has always been widely publicized.
Yet the question remains: with so much free content available online will users actually subscribe to Disney’s new site?
Iger seems to think they will: “It’s wrong to assume that because there is a lot available on the Internet that is free that it will be hard to monetize.”
While many initially questioned the move, it actually may prove to be a great decision. If users really are willing to pay for content that they perceive as valuable – and it seems that they are – then Disney really could capitalize on this model if it’s well-executed.
The Mouse House is known for producing quality content that really resonates with audiences from Grey’s Anatomy to The Bachelorette to Pirate’s of the Caribbean (which is currently exploring a fourth installment). In fact, viewers can’t seem to get enough exclusive information on their favorites; however, it can be tough to find due to Disney’s hyper-protective attitude.
While the press, advertisers and viewers all wish that Disney would be open to making exceptions, its protective approach may actually benefit the company in this instance. By maintaining control over the information that is shared with the public, Disney has placed itself in a position to offer truly exclusive content, thereby making membership more valuable, and, subsequently, more desired (a concept embraced by the likes of American Express and HBO too). Certainly, then, if any major media company can sell VIP access – it’s Disney.
For these reasons, Disney is in a position to credibly sell membership, but challenges still lie ahead. In order to realize success, Iger will really have to identify and define exactly what Disney will sell on this site.
Currently, the company makes exclusive content available in the form of specials, interstitials and extras on Disney On Demand, ABC, Abc.com, Hulu, and DVD. If the company pares down these efforts it could compromise the success of these other media. Conversely, the Mouse House needs to rigorously track what it releases for free in order to avoid diminishing the value of membership to a subscription-based site.
It will be interesting to see what else the company will provide to users. If successful, Disney won’t only be responsible for pioneering a new model online, but it could also offer media execs and marketers alike new ways to generate buzz and strengthen loyalty.