Insights

In the Streaming Wars, Timing Is Everything — and This Stock Looks Like a Winner

As streaming competition grows, a platform’s release schedule is increasingly crucial to subscriber performance. Disney (NYSE: DIS) has shifted its release strategy over the last year, resulting in positive growth for its flagship streaming service, Disney+.

Here’s why the company’s simple switch of the weekday when it releases content has significantly boosted subscriptions. 

Understanding the competition

In the age of traditional linear television, networks planned their content lineups with an eye on the competition. For instance, when ABC’s Lost was at its height from 2004 to 2010, rival networks avoided broadcasting their biggest shows in the same time slot.

The shift to streaming has allowed consumers to view content at any time and any place, with release schedules seemingly insignificant. However, the rapid increase in streaming competition since 2019 has forced companies to once again consider their opponents when releasing content. 

Netflix (NASDAQ: NFLX) debuted its streaming service in 2007, venturing into original content production in 2013. While the company enjoyed years at the top, the launch of Disney+, Warner Bros. Discovery‘s HBO Max, Comcast‘s Peacock, and others meant streaming originals increased by 170% from the second quarter of 2020 to the fourth quarter of 2021. In the same time frame, Q2 2020 saw 54% of streaming originals released on Fridays, with that figure decreasing to 30% by Q4 2021. Evidently, streaming companies have realized that the weekday when a title releases is significant, and have adapted accordingly.

Amazon continues to favor Fridays, releasing about 70% of its titles on that day. However, HBO Max and Peacock have mostly adopted Thursdays, choosing it for almost 80% and 65%, respectively, of their titles.

Netflix spreads out its series releases throughout the week, debuting 40% of its content on Fridays, about 20% on Thursdays, and 25% on Wednesdays. However, the company has lost over 1 million subscribers since the start of 2022, suggesting its lack of commitment to a specific release day hasn’t helped its business. 

Alternatively, Disney+ vastly altered its release strategy since launching in 2019, with a shift in schedule leading to a major win. 

Adapting pays off

For the first two years of its service, Disney+ launched 73% to 90% of its titles on Fridays. Its top-performing series, The Mandalorian, WandaVision, and The Falcon and the Winter Soldier, all stuck to releasing new episodes every Friday. However, the platform made a major switch in Q3 2021 by releasing 30% of its series on Wednesdays, growing that to 52% in Q2 2022. 

In 2022, all of the biggest shows on Disney+, such as Obi-Wan Kenobi, Moon Knight, and Ms. Marvel, have stuck to debuting weekly episodes on Wednesdays. Fridays now predominantly focus on premiering lower-profile series and children’s titles.

Disney has boosted subscriber signups by switching from Fridays to Wednesdays for its major releases. When Marvel’s The Falcon and the Winter Soldier premiered in March 2021, the show would see a sharp rise in Disney+ signups on Fridays when episodes were released. That figure peaked on Saturdays, then started to decline by the end of the day.

However, when Disney debuted the Marvel series Hawkeye in November 2021, the show stuck to a Wednesday schedule. Disney saw signups rise on release day, and once again peak on Saturdays, before declining later that day. The change has meant that the Wednesday schedule extended the period of heightened growth for sign-ups to four days. 

After ramping up Wednesday releases in Q4 2021, Disney+ has grown subscriptions by 18.7% — from 116 million members in Q3 2021 to 137.7 million in Q2 2022. The sharpest quarterly increase occurred from Q4 2021, when the change was implemented, to Q1 2022 — rising by 9.9%. Conversely, memberships increased by 1.8% the quarter before, from Q3 2021 to Q4 2021 — before the schedule change. Disney’s ability to adapt in the streaming market has allowed it to stay competitive, while enjoying continued subscriber growth.

Looking ahead

While multiple factors have contributed to the sustained growth of Disney+, the company’s willingness to note a seemingly inconsequential factor, such as release day, and adapt accordingly, bodes well for the service’s longevity.

The streaming industry is currently in a state of flux as new platforms enter the market and companies introduce features such as ad-supported tiers and password crackdowns. Disney is currently choosing Wednesdays more than any other streaming platform for its content releases. However, if a competitor like Netflix begins launching its hard-hitting titles on the same day, and Disney once again adapts accordingly, investors will know that the company is continuing to consider all factors when optimizing subscriber growth. 

Dani Cook has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Netflix and Walt Disney. The Motley Fool recommends Comcast and Warner Bros. Discovery, Inc. and recommends the following options: long January 2024 $145 calls on Walt Disney and short January 2024 $155 calls on Walt Disney. The Motley Fool has a disclosure policy.

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