Star wars rise of skywalker cinepolis

Table of Contents

3Executive Summary

4Introduction

5Statement of the Purpose

7SWOT Analysis

7Strength

8Weaknesses

8Opportunities

9Threats

10Recommendation

10Conclusion

12Appendix

13References:

Executive Summary
Video streaming services is gaining popularity for many consumers with users now more than half of television viewers. The video streaming service is dominated by the likes of Netflix, Amazon, Hulu and many more and as more people are subscribing to these services, other companies that traditionally offer their services in traditional media, have come to realize the advantage of video streaming. Disney will be launching its Disney Plus streaming service later in 2019 with a release in Mexico in the following year. However, it has become apparent that it will be difficult for Disney Plus to compete with Netflix in Mexico given that Netflix is offered at a lower price in the country with access to a large library of content. With the threat of piracy and competition, Disney Plus has to leverage the popularity of the Disney brand and its exclusive rights to famous franchises to gain a foothold in the Mexican market.

The widespread availability of internet technology has allowed consumers to take advantage of its benefits. In the entertainment industry, the internet technology has made it possible for consumers to watch various programs through their computers, smartphones, tablets and other mobile devices that can access the internet. This service is referred to as a streaming service where end users can use their media players to play digital content without fully downloading the content.

Prior to the introduction of streaming services, consumers view shows and programs on television, DVDs, Blu-ray discs and other physical media. In some cases, digital content is downloaded to a computer or other devices before it can be played back. With streaming services available, users can eliminate the need for a physical copy of the content or download it to their devices for it to be viewed (Rodriguez, 2017).

Introduction

Video streaming services was introduced in the mid-2000s with the likes of iTunes offering downloadable television series in 2005 using the direct payment approach. In 2007, Netflix, which was originally a website dedicated for DVD rentals, started offering streaming content. Soon after, other services, including NBC and Fox-owned Hulu and Amazon began offering the service as well (Waterman, Shermana, & Wook, 2013). In the 2010s and onwards to present time, many services have also began offering streaming services such as Dish Network's Sling TV, DirectTV Now, YouTube TV and many more, allowing end users a variety of choices.

With the advent of these services available to users any time they want, how users watch television is in the process of transformation. Today, video has become a regular content in the web. According to data from Nielsen, there are 145 million people who watch videos online in the U.S., whereas data on users who watch traditional television is about 290 million (Schonfeld, 2012). Comparing the two statistics, online video streaming is gaining a foothold among people given its recent introduction, which indicates that the video streaming has penetrated audiences successfully as the number of users watching videos online is already half of those who watch TV. This is why streaming services has extended its reach outside of the U.S. and to other regions of the world as well.

Statement of the Purpose
As streaming services have extended its reached internationally given the popularity of the service, more companies that traditionally offer their services via television are now taking advantage of this platform to offer their services to users from other parts of the world. Netflix for instance has 5.5 million new subscribers outside of the U.S., totaling to 7.5 million new subscribers, according to data from the first quarter of 2018. With all new subscribers added to the roster, Netflix has now 118 million subscribers worldwide, making Netflix the number one streaming service globally. Second in rank is Amazon with about 90 million subscribers worldwide and Hulu with 17 million subscribers (Cook, 2019).

Other companies such as Disney with its Disney Plus (Disney+) streaming service, slated to be lauched on November 12, 2019, is set to become a direct competitor to the likes of Netflix, Amazon and other streaming services. The announcement of the launch was made in September 2017 and according to analysts from Morgan Stanley, Disney Plus could have 13 million subscribers by the end of 2020. By 2024, it is projected that Disney Plus could have 130 million subscribers worldwide (Marshall & Gates, 2019).

Disney Plus will include Disney originals such as Frozen 2, Toy Story 4 Star Wars: Episode IX — The Rise of Skywalker, the live-action remake of The Lion King. Additional content to be added later would include Avengers: Endgame (Marshall & Gates, 2019). Although Disney Plus is yet to be launched in the latter part of 2019, announcement has already been made for its launch in other regions such as in Mexico, slated for a 2020 first quarter release (Garrida, 2019).

The Latin American region ranks third behind Asia and Western Europe in terms of the region with the largest attraction of video streaming services. Despite the high rates of piracy and the limited broadband penetration, the Latin American market shows great potential, which is why many video streaming services like Disney Plus wants to penetrate this market. Currently, Netflix holds the top position in the Latin American market, particulalry Brazil and Mexico (Roshan, 2017).

Statistics show that the Latin American video streaming service would grow to US $859 million in 2021 in terms of revenue (Roshan, 2017). Currently, Mexico ranks number 5 in the global list of countries with the number of homes that have video streaming services, behind Brazil. In the Mexican market, video streaming services is expected to rake in revenue by up to US $224 million by 2021, with Netflix being the market dominant (Roshan, 2017).

It is also expected that the penetration rate of video streaming services in Mexico would increase from 11.6% in 2016 to 17.8% by 2021 and by 2025, 30% of Mexican households are expected to pay for video streaming services. Aside from Netflix, the current popular services in the country are provided by companies such as Clarovideo, Blim, Cinépolis Klic and HBO Go/Now (Roshan, 2017).

Disney is already a popular brand and it would only be time before Disney Plus could gain a chunk of consumer share in the Mexican market. The question that remains is how Disney Plus will take on such a gigantic task of penetrating the already saturated video streaming Mexican market, especially with Netflix reigning supreme, along with other competitors from the U.S. as well as local ones.

SWOT Analysis
Strength
Disney Plus' strength lies in the success and popularity of the Disney brand. Disney, without a doubt, is one of the most recognizable brands around the world. Disney Studios has been producing and releasing content in movies and television for decades that many people have loved and grown with.

Parent company The Walt Disney Company has many divisions, including its various film studios including Walt Disney Pictures, dubbed as one of the "Big Five" film studios in Hollywood, which has produced the Pirates of the Caribbean franchise, the studio's most successful franchise. The Walt Disney Company also has the Walt Disney Animation Studios, which has released highly successful animated movies such as the original The Lion King, Aladdin, The Little Mermaid to more recent ones such as Frozen, Wreck-It Ralph and Moana, which have captured the hearts of both young ones and adults.

With the addition of Marvel Studios to Disney in 2009, the company now holds license to Marvel characters that adds more strength to the brand's popularity. On the television front, Disney dominates the television market through subsidiaries such as ABC broadcast network, Disney Channel, ESPN and National Geographic Network to name a few. With all these names and brands already being popular in their own rights and with popular content to be streamed and created solely for Disney Plus, the strength of the Disney Plus in the Mexican market is high.

Weaknesses
Despite the popularity of the Disney brand as an entertainment giant, Disney Plus also has its share of weaknesses. Netflix and other streaming services that are in Mexico already have a head start in terms of consumer base, which will make it difficult for Disney to match. Additionally, most of Disney Plus' content will be exclusively Disney-produced media, which if compared to Netflix, contains a variety of content from other studios as well as Netflix original content that are also gaining popularity such as Stranger Things and Spanish language originals such as La Casa de Papel (Money Heist), La Reina del Flow (The Queen of Flow) and El Chapo (Ingrid, 2019).

One constraint that analysts see with the release of Disney Plus is its family-oriented shows, which if compared to the content produced by Netflix and Amazon, are more oriented towards adults (Jhonsa, 2018). This can be viewed as a weakness on Disney Plus' part as the limited content may hinder audiences to commit to the service. If there are more content available in other streaming services, audiences might as well subscribe to these streaming services rather than spend their money on a service that has a limited content.

Opportunities
One of the opportunities that Disney Plus has is its lower price of subscription compared to Netflix. Netflix in Mexico costs MXN 129 or $6.76 per month for access to 1,273 TV shows and 2,950 movies. According to statistics, Mexico is one of the countries in the world where Netflix is offered the cheapest, given the large number of contents offered (Moody, 2019). In order to stay competitive, Disney Plus needs to be within the same price range or lower.

Disney holds the exclusive right to show all content owned by Disney, Pixar, Marvel and Star Wars films. By having this exclusivity, Disney Plus can have an advantage over its competitors as these film franchises have raked in millions of dollars in the box office. Having the license to these franchises also gives Disney the advantage of producing content exclusive to Star Wars, which fans of the franchise will consume. In addition, owning the rights to show exclusive content of these popular franchises will also be less costly for Disney Plus, compared to other streaming services that need to secure their exclusivity to other franchises (Jhonsa, 2018).

Threats
Piracy is still a problem in the entertainment industry. According to statistics on the matter, as of March 2016, there are 850 pirate sites with a 45 percent increase in the number of pirate site creation in the past six months from the date the data was collected (Dreier, 2016). In Mexico, piracy of digital contents are rampant and this is nothing new in the Mexican market. A survey conducted on Copyright Infringement in the country from March 2016 to March 2017 found that 41.9 million of Mexicans made an illegal purchase of various items including movies and TV shows (El Universal, 2017).

The major drivers of piracy in Mexico are the lax enforcement of the laws pertaining to privacy and the high cost of original content (El Universal, 2017). Despite Netflix being offered at a lower price in Mexico, there is no stopping piracy from becoming a threat to these services and with Disney Plus coming to Mexico, the threat that piracy brings is something that the company needs to face in the country.

Recommendation
However, there is still a big chance for Disney Plus to make it big in the Mexican market given the right strategies. Based on the strengths that were identified for Disney Plus, the streaming service can bank on the popularity of the content it can provide such as the Pirates of the Caribbean franchise, Marvel Cinematic Universe franchise and the Star Wars franchise, which all have created a large fan base and following.

By having exclusive rights to these contents, Disney can create exclusive content for MCU characters that can only be viewed exclusively on the Disney Plus channel. Subscription rate should also be at a lower tier in Mexico as Netflix in Mexico is one of the lowest in the world. If Disney Plus can offer a lower price for exclusive content, consumers will likely subscribe to the service.

As for the issue with piracy, it is not an issue that is exclusive to Mexico as it occurs everywhere. Currently, The Walt Disney Company has joined other companies in the entertainment industry including Netflix, Amazon, AMC Networks, HBO, Telemundo, Televisa, Fox and many more in fighting online piracy in a new alliance called Alliance for Creativity and Entertainment (ACE).

ACE will work in conjunction with the Motion Picture Association of America (MPAA) and its counterparts in other parts of the world to stop piracy. The efforts of ACE will be combined with the efforts of these networks to put a stop to the rampant piracy of movies, TV shows and other content (Opam, 2017).

Conclusion
Video streaming services might as well become the future of TV entertainment as it allows users to watch various contents at their convenience. As the popularity of streaming services continue to rise, and more content are added every now and then, consumers will find it more cost-effective to use streaming services instead of the traditional TV subscription. Disney Plus may be a late arrival to the party but it's not the end for Disney Plus.

The video streaming industry is quite young and there will be new additions in this segment in the years to come as the internet technology is still developing. With new development and more demand from consumers, the likes of Disney Plus will find its place in the video streaming service that is currently dominated by competitors.

Appendix
SWOT Analysis Table

Strengths

Weakness

· Popularity of the Disney brand

· Exclusive license to MCU, Star Wars and other famous franchises

· Various brands (Disney Channel, ESPN and National Geographic Network etc.)

· Limited content

Opportunities

Threats

· Low price of streaming service in Mexico

· Exclusive right to create original content for exclusive franchises

· Piracy

References
Cook, S. (2019, March 14). 60+ Netflix statistics and facts stats that define the company’s dominance [2019 version]. Retrieved July 6, 2019, from CompariTech: https://www.comparitech.com/blog/vpn-privacy/netflix-statistics-facts-figures/

Dreier, T. (2016, June 4). Online Video Piracy: Serious Threat or Seriously Overblown? Retrieved July 6, 2019, from Streaming Media: https://www.streamingmedia.com/Articles/ReadArticle.aspx?ArticleID=111676

El Universal. (2017, October 30). What is Behind Piracy. Retrieved July 6, 2019, from El Universal: https://www.eluniversal.com.mx/english/what-behind-piracy

Garrida, R. (2019, April 14). Disney +, more details of the new video streaming service: interface, exclusives and release date in Mexico. Retrieved July 6, 2019, from Xataka: https://www.xataka.com.mx/streaming/disney-detalles-nuevo-servicio-streaming-video-interfaz-exclusivas-fecha-lanzamiento-mexico

Ingrid. (2019, July 1). 45 Best Spanish TV Shows on Netflix (2019). Retrieved July 6, 2019, from Second-Half Travels: https://www.secondhalftravels.com/spanish-language-tv-shows-netflix/

Jhonsa, E. (2018, February 7). Disney Has Big Strengths -- and Weaknesses -- as it Takes on Netflix and Amazon. Retrieved July 6, 2019, from The Street: https://www.thestreet.com/story/14479371/1/disney-streaming-strengths-and-weaknesses.html

Marshall, R., & Gates, C. (2019, June 14). Disney Plus: Here’s what we know so far about the upcoming streaming service. Retrieved July 6, 2019, from Digital Trends: https://www.digitaltrends.com/business/disney-plus-streaming-service-news/

Moody, R. (2019, April 9). Which countries pay the most and least for Netflix? Retrieved July 6, 2019, from CompariTech: https://www.comparitech.com/blog/vpn-privacy/countries-netflix-cost/

Opam, K. (2017, June 13). HBO, Netflix, other Hollywood companies join forces to fight piracy. Retrieved July 6, 2019, from The Verge: https://www.theverge.com/2017/6/13/15791688/hbo-netflix-hollywood-ace-fight-piracy

Rodriguez, A. (2017, January 18). Ten years ago, Netflix launched streaming video and changed the way we watch everything. Retrieved July 6, 2019, from Quartz: https://qz.com/887010/netflix-nflx-launched-streaming-video-10-years-ago-and-changed-the-way-we-watch-everything/

Roshan. (2017, January 10). A Peek into Latin America’s Video Streaming Market. Retrieved July 6, 2019, from MUVI: https://www.muvi.com/blogs/peek-latin-americas-video-streaming-market.html

Schonfeld, E. (2012). How People Watch TV Online And Off. Retrieved July 6, 2019, from TechCrunch: https://techcrunch.com/2012/01/08/how-people-watch-tv-online/

Waterman, D., Shermana, R., & Wook, S. (2013). The economics of online television: Industry development, aggregation, and “TV Everywhere”. Telecommunications Policy , 725-736.