In fiscal year 2022, Disney plans to spend $33 billion on content.
Because there are so many streaming videos on-demand services, content is the most important distinction, which means enormous costs for the top competitors.
According to the company's 10-K filing with the Securities and Exchange Commission for the fiscal year 2021, which began on October 1, 2021, the Walt Disney Co. aims to spend $33 billion.
The corporation spent $25 billion in fiscal year 2021.
Why the rise of $8 billion?
In their 10-K filing, Disney stated, "The increase is driven by higher spend to support our DTC expansion and usually assumes no substantial interruptions in production due to COVID-19."
Extending our reach
Disney is continually striving to broaden its appeal, particularly through its direct-to-consumer streaming services.
However, Disney+ will not be the sole source of content for the corporation.
They want to broaden the reach of their other services, such as Hulu and ESPN, as well as their own streaming service.
Variety says that the $33 billion budget includes content sports rights as well as other content.
Disney signed an agreement with the National Football League earlier this year.
According to Bloomberg in March, Disney will pay the NFL $2.7 billion per year in exchange for two Super Bowls, six more regular-season games, and a playoff game spread across Disney-owned ABC, ESPN, and ESPN+ networks.
Disney wants to develop 50 films for theatrical and streaming distribution under the Disney banner in the fiscal year 2022.
Walt Disney Pictures, Twentieth Century Studios, Marvel, Lucasfilm, Pixar, and Searchlight Pictures are presently producing films.
The amount of content they want to develop under their General Entertainment Content category is not included in the 50 films.
They aim to release 60 unscripted series, 30 comedy series, 25 drama series, 15 docuseries and limited series, ten animated series, five made-for-TV movies, and potentially more under this category.
The rate of growth is slowing.
According to Seeking Alpha, Disney+ subscribers increased by 2.1 million between Q3 FY2021 and Q4 FY2021, indicating that the company's growth is slowing, but this is true of other SVOD firms.
Disney and Netflix can't keep growing their viewership at an exponential rate indefinitely.
There has to be a balancing act.
As we stated a few weeks ago, subscriber turnover in 2022 is expected to be higher than in prior years as individuals attempt to save money.
With fresh additions like HBO Max and Peacock, there are even additional SVOD options.
Consumers must determine how many services they can buy and which services will supply them with the most relevant material.
Could a larger, more diverse content selection keep Disney+ users from switching to competing services?
Insider's Opinion
Despite a slowing rate of subscriber growth, Disney still has a lot to offer its customers, including Disney-produced content, content licensed from other studios, and a bundled offering that combines Disney+, ESPN+, and Hulu into one super-streaming package.
Spending more on content will help the company compete against other SVOD providers while also covering COVID-related costs.
Although the current economic climate is not ideal for anyone, we believe Disney will weather the storm, and its portfolio of content will keep users loyal and churn low.