Disney Streaming Strategy Presentation for Sustainable Growth

This presentation outlines a strategic approach for Disney to enhance its streaming services by focusing on customer-centricity, proactive content creation, and organizational alignment. It addresses challenges such as competition in the OTT space and the need for cultural integration post-acquisition, offering recommendations to drive sustainable competitive advantage through unified branding and data-driven customer insights.

• Disney
• Streaming
• Strategy
• Presentation
• Customer-centricity

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1. Disney Streaming love LUSEM Consulting Group Lund University School of Economics and Management Ella Zhao, Hanna Rasmusson, Samuel Spjuth & Erik Mansson 1/11/2019 Presenting to: The Board and Management Team of Disney

2. Disney Streaming love Situation Analysis Alternatives Recommendation Implementation Financials Risks Conclusion

3. The customer is already in love with you, its time you fall in love with your customers

4. The recommendation in short Build a streaming ecosystem to engage with customers Create proactive timeless content Customer centric internal organization Getting to know your customer base and leverage within

5. Agenda Situation Analysis Alternatives Recommendation Implementation Financials Risks Conclusion

6. Where do we start? Timeless magical experiences Multi brand corporation with skilled artists $55,1 billion revenue (2017) Ongoing acquisition of Fox Heritage since 1923 Situation Analysis Alternatives Recommendation Implementation Financials Risks Conclusion

7. The current challenges for Disney ahead Leverage streaming synergies Internal Face the OTT competition organization post acquisition Costumer insight Strong competition in place How to use size to leverage growth Get to know the customer base Cultural integration needed Situation Analysis Alternatives Recommendation Implementation Financials Risks Conclusion

8. Main challenge How can Disney position it s OTT offering to find sustainable competitive advantage in the market and develop creative internal synergies? Recommendation Drive customer centricity through data-driven but content focused unified OTT brand, betting on corporate culture as completive advantage Situation Analysis Alternatives Recommendation Implementation Financials Risks Conclusion

9. Getting to know the costumer 3 hours recreational screen time/day Average 2 accounts per person Attention Brand and content driven Situation Analysis Alternatives Recommendation Implementation Financials Risks Conclusion

10. Forces in the OTT market 12M US households (3x,2013) Pay TV -1,6% churn rate 2017 OTT market 40% viewing hours occupied by Netflix 81,1 million non viewers (linear TV) 2021 Situation Analysis Alternatives Recommendation Implementation Financials Risks Conclusion

11. Navigating the digital transformation Omnichannel (ex H&M) experience Ecosystem (ex Netflix) (ex Netflix) Ecosystem Integrated brand Supplier Supplier (ex Unilever) (ex Unilever) Modular (ex PayPal) Superior product Drive Plug n Play Situation Analysis Alternatives Recommendation Implementation Financials Risks Conclusion

12. Understanding the customer centricity in OTT Customer centric Reactive Timeless Situation Analysis Alternatives Recommendation Implementation Financials Risks Conclusion

13. Navigating the competitive landscape On-demand Hulu Netflix Amazon On-demand TV HBO OTT Ecosystem Singular Traditional cable Linear Situation Analysis Alternatives Recommendation Implementation Financials Risks Conclusion

14. Navigating the strategic landscape Content driven Disney HBO Customer centric Revenue centric Amazon On-demand TV Data driven Situation Analysis Alternatives Recommendation Implementation Financials Risks Conclusion

15. Alternatives routes forward Daughter brands Develop separate daughter brands for OTT aimed at different target audiences Acquire Acquire HBO now to develop mature target audience offering Customer centricity Drive consumer centricity through internal restructuring and unite offering under one OTT brand Situation Analysis Alternatives Recommendation Implementation Financials Risks Conclusion

16. Evaluation the alternative routes Stay true to brand identity 1 Drive customer bas 2 Develop and sustain creative culture 3 Situation Analysis Alternatives Recommendation Implementation Financials Risks Conclusion

17. Evaluating the possible routes Daughter brands Acquire HBO Customer centricity Stay true to brand identity 1 Drive customer bas 2 Develop and sustain creative culture 3 Situation Analysis Alternatives Recommendation Implementation Financials Risks Conclusion

18. Main challenge How can Disney position it s OTT offering to find sustainable competitive advantage in the market and develop creative internal synergies? Recommendation Drive customer centricity through data-driven but content focused unified OTT brand, betting on corporate culture as completive advantage Situation Analysis Alternatives Recommendation Implementation Financials Risks Conclusion

19. Explaining the recommendation in three steps Key objectives Unify offering under one OTT brand Higher brand awareness and customer data Leverage data to drive creative process and build timeless content Building content as competitive edge Internal restructure to deliver customer centricity and build employer brand Acquiring top talent Situation Analysis Alternatives Recommendation Implementation Financials Risks Conclusion

20. Three main building blocks of implementation Higher brand awareness and customer data Building content as competitive edge Acquiring top talent Proactive Timeless content Customer centric internal reorganization Build streaming ecosystem Situation Analysis Alternatives Recommendation Implementation Financials Risks Conclusion

21. Redesign Disneyflix & Launch integrated platform Building streaming ecosystem ? Purpose $ Cost Action People One account with varied subscription package Collecting customer data Media campaign Design one interface wit all subsidiary content Bamtech 100 m Marketing Data center Situation Analysis Alternatives Recommendation Implementation Financials Risks Conclusion

22. Capitalize customer data through proactive contet making Proactive Timeless content ? Purpose $ Cost Action People Analyze subscription/time /klicks per day 2,8 million Remain competitive advantage on timeless content through data analysis Data analysts Editors/Animation teams / Parks & resorts/ Studios Use data in creating innovative content in all segment Situation Analysis Alternatives Recommendation Implementation Financials Risks Conclusion

23. Redesign workspace in combining data and content building Customer centric internal reorganization ? Purpose $ Cost Action People Everyday interaction Workshops Employer branding Redesign floor space Managers Employees Redesign working space 85 million Facilitate data driven content making Situation Analysis Alternatives Recommendation Implementation Financials Risks Conclusion

24. Redesign workspace in combining data and content building Panel/Studio desing Adult professionals Data Board College students Cool kids in school Children Situation Analysis Alternatives Recommendation Implementation Financials Risks Conclusion

25. Timeline Costs 2018 2019 2020 2021 2022 2023 Streaming Ecosystem $100m Content Building $2.8m Reorganization $85m Situation Analysis Alternatives Recommendation Implementation Financials Risks Conclusion

26. Implementation costs Costs 2018 2019 2020 2021 2022 2023 Streaming Ecosystem $100m Build ecosystem Redesign of system Marketing Data collection 2018 2019 2020 2021 2022 2023 100.0 80.0 273.6 10.0 20.0 161.8 10.0 20.0 178.5 10.0 20.0 205.1 10.0 20.0 256.5 10.0 Total 100.0 363.6 191.8 208.5 235.1 286.5 $1.4BN Situation Analysis Alternatives Recommendation Implementation Financials Risks Conclusion

27. Implementation costs Costs 2018 2019 2020 2021 2022 2023 Content Building $2.8m Proactive timeless content Data analysts 2018 2019 2020 2021 2022 2023 2.8 2.8 2.8 2.8 2.8 2.8 Total 2.8 2.8 2.8 2.8 2.8 2.8 $17MN Situation Analysis Alternatives Recommendation Implementation Financials Risks Conclusion

28. Implementation costs Costs 2018 2019 2020 2021 2022 2023 Reorganization $85m Reorganisation Redesing working space Workshops 2018 2019 2020 2021 2022 2023 60 25 60 25 Total 0 85 85 0 0 0 $170MN Situation Analysis Alternatives Recommendation Implementation Financials Risks Conclusion

29. Implementation costs Total Build ecosystmem Proactive timeless content Reorganisation 2018 2019 2020 2021 2022 2023 100.0 2.8 0.0 363.6 2.8 85.0 191.8 2.8 85.0 208.5 2.8 0.0 235.1 2.8 0.0 286.5 2.8 0.0 Total 102.8 451.4 279.6 211.3 237.9 289.3 Total funds needed: $1.5 billion Fund with internal funds Situation Analysis Alternatives Recommendation Implementation Financials Risks Conclusion

30. Driving revenues Revenues from streaming services 16,000.00 Revenue of $15 BN 14,000.00 12,000.00 10,000.00 8,000.00 Streaming accounting for over 40% of revenue in Media Network 6,000.00 4,000.00 2,000.00 - 2018 2019 2020 2021 2022 2023 Streaming ESPN+ Streaming Disney 85 million subscribers 2023 Situation Analysis Alternatives Recommendation Implementation Financials Risks Conclusion

31. Increasing profits Operating profits Growing operating margins: 10-15% 2,500.00 2,000.00 1,500.00 Profit $2 BN 2023 1,000.00 500.00 Covering profits lost on 7% decrease in cable networks - 2018 2019 2020 2021 2022 2023 Streaming ESPN+ Streaming Disney Situation Analysis Alternatives Recommendation Implementation Financials Risks Conclusion

32. Investments paid back in two years Payback 2000.0 1500.0 1000.0 500.0 0.0 2018 2019 2020 2021 2022 2023 -500.0 Situation Analysis Alternatives Recommendation Implementation Financials Risks Conclusion

33. Gaining a market share 2023 Hulu today: 17% Disney 2023: 35% 35% 65% Total market value 2023: $82 billion (17% CAGR) Disney Others Situation Analysis Alternatives Recommendation Implementation Financials Risks Conclusion

34. Risks and mitigations Likeliness Risk Mitigation 1. Speed of market entry to slow Bamtech and Fox giving early move advantage Integrate market driven and creative forces for balanced results Betting corporate culture work through in-depth workshops driving urgency for change 3 2. Data mismanagement leading to slow creative process 3. Employee resistance to change 1 2 Impact Situation Analysis Alternatives Recommendation Implementation Financials Risks Conclusion

35. Main challenge How can Disney position it s OTT offering to find sustainable competitive advantage in the market and develop creative internal synergies? Recommendation Drive customer centricity through data-driven but content focused unified OTT brand, betting on corporate culture as completive advantage Situation Analysis Alternatives Recommendation Implementation Financials Risks Conclusion

36. The current challenges for Disney ahead Leverage streaming synergies Internal Face the OTT competition organization post acquisition Costumer insight Take content driven consumer centric postion Pushing insight through rest of the organization Interaction and data collection through streaming ecosystem Customer centric internal organization Situation Analysis Alternatives Recommendation Implementation Financials Risks Conclusion

37. Navigating the strategic landscape Content driven Disney HBO Customer centric Revenue centric Amazon On-demand TV Data driven Situation Analysis Alternatives Recommendation Implementation Financials Risks Conclusion

38. The customer is already in love with you, its time you fall in love with your customers

39. Appendix - Change management process for restructure Communicate the vision for changing office landscape Develop urgency for customer centric change Build intra- managerial and key player coalitions Form task-force to lead change

40. Appendix - SWOT Timeliness product Talents Scale Diversified company S Synergies from BEMtech and Fox Increasing screentime Fierce competition Lower fees in the industry T O W Data insufficiency for low number of subscribers