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Even Disney Didn’t Know How Much It Needed Disney+

Nearly a year after its release, the streaming service has become the most promising part of the Mouse House’s portfolio

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Disney, the company, has had a rocky year. The sudden end of safe mass gatherings has posed an existential threat to several pillars of the Mouse House’s business. Last month, Disney’s theme park division announced a staggering 28,000 layoffs out of more than 100,000 U.S. employees. The company is reportedly mulling a lawsuit to push the state of California into reopening its theme parks, but for now Disneyland and other attractions remain closed, as they have been for the past seven months (although Florida’s Disney World is open). And just a year after the record-shattering triumph of Avengers: Endgame, Disney’s theatrical release slate has been similarly decimated, with titles like Black Widow and West Side Story delayed and then pushed off the 2020 calendar entirely. In the first three months of lockdown alone, Disney’s profits declined by a catastrophic 91 percent. (In August, though, senior executives saw their salaries restored to pre-pandemic levels after a cut in March that was supposed to last until the company saw “a substantive recovery in business.”)

Disney+, the streaming service, has fared better. Launched to great fanfare last November, the platform was clearly designed to carry Disney into the future, an enormous bet on the increasing importance of online distribution to the Mouse’s hold on hearts and minds. “Disney+ isn’t a lesser branch of the family tree,” I wrote at the time. “It’s a core pillar of the business in an age when home entertainment largely is entertainment—and Disney has invested accordingly.” No one, either inside or outside the company, realized just how important that investment would prove to be.

Disney’s ex-CEO Bob Iger, who handed the position over to successor Bob Chapek in February but remains at the company as executive chairman, commissioned Disney+ to get his company into the Streaming Wars, the ongoing battle among megacorporations to assemble the most enticing walled garden possible for potential subscribers. Just three months later, it would become a weapon in an even more urgent, even existential, struggle: The rush to match eyeballs to entertainment when so many of the usual channels were instantly slammed shut. Now, a year on from its release, Disney+ has proven more suited to the moment than previously imagined.

Not that it started small. Disney+ came out of the gate with The Mandalorian, a Star Wars story that ended up winning a slew of Emmys for its technical achievements in cinematography, stunts, special effects, and more—all in addition to a surprise nomination for Outstanding Drama. Marvel spinoff series like WandaVision and The Falcon and the Winter Soldier may have been delayed due to production delays caused by COVID-19, but they were on the books for the service long before. Even in a race whose other players were massive tech companies (Amazon, Apple), rival conglomerates (WarnerMedia), and trailblazers with a head start (Netflix), Disney+ was clearly built to win.

Still, the biggest sea change in Disney+’s first year of life is just how much has been added to its already daunting slate of originals. The closure of theaters has turned streaming services into an obvious new outlet/dumping ground, depending on your spin, for movies caught between production and planned theatrical release: Greyhound on Apple TV+; Borat Subsequent Moviefilm on Amazon Prime; even, briefly and potentially, the James Bond film No Time to Die, according to reports. Disney just happened to have its Plan B in-house—vertical integration being the selling point of an owned-and-operated service in the first place, if not with this specific benefit in mind.

The most high-profile instance of a Disney+ exclusive that wasn’t planned as such is Mulan, the live-action remake that held its in-person premiere just six days before L.A.’s stay-at-home order went into effect. Six months later, the film became a trial balloon for a new strategy called Premier Access, which charged subscribers an additional $35 for early access to the film. Three months later, on December 4, Mulan will be made available to all subscribers without the extra fee. (Mulan did make it to theaters overseas, where it brought in just under $70 million worldwide.) Until then, the film is also available through outside retailers like iTunes and Google Play, though 90 days is a short time to wait until Mulan becomes part of the standard Disney+ catalog—far shorter than the exclusivity window most theaters were protecting before disaster struck.

The success of that venture, and of how viable digital revenue can be as a substitute for box office, likely won’t be clear until Disney’s next quarterly earnings report in early November. But earlier in the summer, Disney+ became the home of the highly anticipated Hamilton “movie,” or filmed stage performance starring the original cast, at no additional cost to subscribers. Over July 4 weekend, the release was linked to a spike in app downloads and cited as a factor in the 60.5 million subscriptions Disney+ reached by August, within range of its stated five-year goal. That’s less than a third of chief rival Netflix’s more than 190 million worldwide, but also substantially more than (older) sibling service Hulu’s 35 million. Most streaming services, including Netflix, have benefited from their audience’s forced time indoors—but Disney has turned one division’s loss into another’s effective advertisement.

But not all of Disney+’s highest-profile exclusives have been pivots from the multiplex. Beyoncé’s Black Is King, a visual elaboration on her Lion King soundtrack from last year, took the superstar’s multimedia perfectionism to a new hub, after Lemonade released on HBO and Homecoming came out on Netflix. Released weeks after Hamilton, Black Is King is a reminder that even outside the context of a pandemic, Disney+ is plenty ambitious in its own right.

Earlier this month, Disney announced a major reshuffle at the very top of its org chart. It’s the kind of shuffle that’s inscrutable to outsiders and, according to some accounts, a few insiders as well. The titles involved include “chairman of general entertainment content,” “head of media and entertainment distribution,” and “chairman, studios content,” all of which are somehow different jobs. But the gist is easy enough to parse: By splitting up production and distribution, Disney is positioning Disney+ and other streaming outlets as even more central to its strategy going forward than they were before. “Franchise-based content,” as Chapek charmingly put it, will be created before its release format is determined. It’s likely where things were already heading, but as with so many other trends, the pandemic has catalyzed them. No one could have anticipated where we find ourselves, and yet Disney+ found itself oddly suited to the times.