5 Ways Disney Can Use Competitive Intelligence to Take on Netflix

October 09, 2017

Walt Disney is the world's second largest media company, and they're now looking to launch their own streaming service in 2019. Disney has purchased a 75% stake in Bam Tec, the MLB-founded video streaming platform, subject to regulatory approval, to support the technical aspects of building the new platform.

However the challenges for the brand may be more complex than technical competence, as Disney moves into the rapidly growing and fiercly competitive market of TV streaming. 

We have written before on converting competitive intelligence into market share, but how can this approach work for an established brand such as Disney as they move into a new market? 

In the article below we look at 5 types of brand and competitor intelligence that could help Disney to make inroads into Netflix's market share. 

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1.  What do people like most about the Netflix product?

By engaging with Netflix's customer base, Disney can start to gain an understanding of what makes Netflix appealing to its broad consumer base. The features that are popular, the features users wish they had but don't, and also any pain-points that are at the front of users' minds.

Disney can also collect brand intelligence to start to identify the sub-segments within Netflix's customer base. The key to success here is not to think of your competitor's customer base as a homogeneous group, there will be sub-segments within that are attracted to the product for completely unique reasons. This data will be crucial to compare against the strengths of Disney's brand, and their various media offerings to gain competitve advantage in areas where Netflix is weak and Disney is strong. 

2.  What do people like about the Netflix brand?

Whilst researching this post, we have come across claims that all of Netflix's top 5 shows are from Marvel (which is owned by Disney), but Netflix keeps its viewing figures a closely guarded secret, so this can't be verified. One can understand why, as this would openly reveal how dependent Netflix is on content providers such as Disney, rather than their own content. 

The Netflix brand is made up of the shows contained within it, so if Disney does go ahead and begin to pull its content from their network, what damage will this cause? It's difficult to predict, however it will be easy to measure over the coming months, through regular brand intelligence audits.

3.  What are the current strengths of the Disney brand?

The Disney brand and sub-brands are market-leading, and as diverse as they are gargantuan. Both Luke Skywalker and Ironman are homed in the Disney stable, along with the more obvious Pixar and Disney heroes. These are sub-brands and characters that have strong and broad appeal across many demographics. Disney will need to research thoroughly which of their franchises are the strongest pulls for the different segments of Netflix customers. 



4.  What are the objectives for the Disney brand?

Sales objectives for the Disney brand will be straight-forward to measure. The big questions revolve around their brand objectives, as Disney looks to become a mainstream player in the streaming market (yep, pun intended). Are they looking to dominate the space and become front-of mind, or do they see their offering as an add-on for subscribers to Netflix and other players within the market?

Netflix added 5 million members globally in the first quarter of 2017, bringing its total subscriber base to just shy of 99 million members. This is still a relatively small fraction of the global audience for Disney content. For example Rogue One, Disney's latest Star Wars franchise film hit $1 billion at the box-office. This makes me wonder if Disney should be more ambitious, targeting market segments where Netflix content is weak and Disney can exploit its franchises to introduce consumers of this content to streaming. Will Netflix adopt a defensive position and try to double-down on the areas in which they are strong, such as documentaries and niche dramas? 

5.  What progress is Disney making in utilising their brand strengths to gain market share?

This again comes down to taking regular brand intelligence audits of the Netflix and Disney brands to identify any shift in sentiment towards either company. When measuring brand sentiment, it is important to get a cross section of all customers, rather than just those that are shouting loudest on social media. 

It's also useful to understand their Net-Promoter-Score, to see if their existing customers are raving about their service, or telling their friends to switch. The viral effects of having consumers spreading the word (good or bad) about their brand may well be the key to winning market share without prohibitive acquisition costs (allowing them to pour more money into high quality content production). 

In conclusion

When crunching the numbers it is clear why Disney has made this move. If Netflix were able to continue their march towards market dominance, Disney's negotiating hand would be weaker when looking to renew their existing deal. The existing arrangement looks stacked in Netflix's favour given their subscription numbers and the popularity of Disney content.

This will be a fascinating contest and we look forward to seeing each side's next move and tracking sentiment amongst consumers in the market. 

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