It has come to our notice that as a highly requested streaming service, Disney+ attracts its target audience. At the same time, due to a considerable number of competitors and their resources and capabilities, it should create and expand new segments to stay competitive. On the basis of the popularity of streaming services, multiple studies currently indicate that they may be regarded as the future of content distribution. For customers, this format manages to grasp the very essence of the 21st-century spirit and combines high-tech solutions with the familiar methods of a pastime (Fagerjord & Kueng, 2019). However, for the media industry, the complex organizations of streaming services represent new technological options for content distribution and new ways of licensing and financing, acquiring audiences and communication with them, charging for content, categorization, creation, and the analysis of content consumption. For existing services, the evaluation of opportunities and application of multiple techniques for improvement is essential for staying competitive.
In the present day, there are many services that offer large amounts of audio-visual content, and it may be challenging to identify the most appropriate one. At the same time, Disney+ stands apart from other companies as one of the most optimal solutions as this platform is a combination of classics and modernity that creates an unprecedented quality of entertainment (Agnihotri & Bhattacharya, 2022). Disney+ is the streaming home of Disney, Marvel, Pixar, Star Wars, National Geographic, and other established franchises (Disney +, n.d.). Consumers may choose any product from a large and always-growing collection of timeless classics and new releases, exclusive new original series and movies, favorite shows’ past seasons, limited-time streaming events and exciting specials, experimental and beloved shorts, unscripted series, and documentaries (Disney+, n.d.). At the same time, the classics and originality of content are combined with modern options on the basis of digital media technologies, including GroupWatch, ad free, 4K UHD and Dolby Atmos sound, and the availability of stories on mobile devices, game consoles, web browsers, smart TVs, and set-top boxes.
It goes without saying that similar to other companies that operate in the market, streaming services apply multiple techniques to gain competitive advantages. They address the elements of marketing that include people and undertake efforts to meet and exceed customers’ expectations. However, before this, various market segmentation and targeting techniques should be applied to identify, choose, and analyze potential clients for creating value for them. At the same time, companies with already identified target audiences constantly aim to cover new market segments for stable growth and development. Thus, during the current campaign, it is essential to analyze Disney’s primary market segment and create new potential segments and subsegments on the basis of its resources and capabilities.
Market Segment Analysis
In general, one of the major advantages of Disney+ that help this streaming services stay highly competitive and even outperform a considerable number of its rivals is its “four-quadrant” appeal. In other words, the company has the ability to cover all major audience demographics, and it is reflected by the variety of audio-visual material provided by the service (Tapp, 2022). According to its official statements, Disney+ offers well-known pictures of its own production, as well as brand-new original content that meets the interests of most viewers, presenting it in the most convenient form that exists today (Disney+, n.d.). Regardless of their age, gender, ethnicity, demographic characteristics, socioeconomic status, and location, consumers are attracted to Disney+ by a massive catalog of exclusive and popular TV shows and films, a well-designed app, the membership’s affordable prices, and the availability of options for comfortable watching.
First of all, the service provides entertainment content for children frequently unavailable on other platforms. It has the most robust offerings from Disney Animation classics and new releases such as Moana, Frozen, or Soul, to Disney shows, a media franchise The Muppets, and National Geographic nature programs. Although Disney’s membership requires a monthly fee and children do not pay, they nevertheless may be regarded as a highly essential target audience as their interest in the streaming service’s content instigates parents’ payment.
For adolescents and adults aged 18-35, Disney+ offers the entire Star Wars saga and Marvel’s superhero blockbusters. For a mature audience, the service offers National Geographic programming, the Fox archives, the past seasons of old series and shows, and documentaries. In addition, regardless of people’s characteristics, there are Disney’s exclusive stories, such as Star Wars-based series The Mandalorian, that has already gained high popularity and united people from various backgrounds. In addition, the company considers customers’ attachment to modern technologies and announced the release of several new Star Wars films and shows that “span timelines, genres and even live-action and animation formats” (Tapp, 2022, para. 27). All in all, it is possible to state that the streaming service aims to cover all demographic groups offering content for literally everyone. In addition, this four-quadrant approach may be regarded as highly successful on the basis of the service’s growth and the number of subscribers. However, the analysis of various demographics will allow the company to identify its primary segment more accurately.
Demographic Segmentation
In the present day, Disney+ serves customers in 59 countries, and its global subscriber base exceeds 100 million people (Dean, 2021). The service has the highest proportion of exclusive content (89%) in comparison with other streaming services. In addition, Disney+ has the highest rates of customer retention – 78% of subscribers retain their subscriptions after six months (Dean, 2021). At the same time, only 20% of Disney+ subscribers choose an annual subscription, while 80% of consumers, especially new ones, pay a regular fee every month. According to the survey conducted by Morning Consult in February 2021, 52% of subscribers located in the United States are male – 48% of subscribers are female, respectively (Dean, 2021). At the same time, women constituted the majority of new subscribers in October 2020.
Concerning the service’s age demographics, the major part of U.S. subscribers is the combination of Generation Z and Millennials. In other words, people aged between 10 and 41 years old currently constitute 64% of Disney+ clients (Dean, 2021). However, all in all, the majority of subscribers are Millennials aged 27-41. They are followed by Generation X (aged 42-57) and Generation Z (aged 10-25). Thus, it is possible to conclude that Disney+ differs from other divisions of The Walt Disney Company focused on families with children by its targeting the adult population even without children. According to statistics, 65% of households in the United States that have a Disney+ subscription do not live with children (Dean, 2021). This tendency may be explained by the conglomerate’s acquisition of Marvel Studios, 20th Century Studios, Lucasfilm, and Searchlight Pictures that produce audio-visual content predominantly for the older population.
In relation to political affiliation, most Disney+ subscribers (44%) identify themselves as Democrats (Dean, 2021). They are more open-minded and ready for the perception of new ideas supported by the variety of content. In addition, 77% of subscribers earn less than $100,000 per year, and 43% of them have an annual income that does not exceed $50,000 (Dean, 2021). This tendency may be explained by the fact that Disney+ offers quality and, at the same time, cost-efficient entertainment affordable for the low and middle classes. In addition, 80% of subscribers live in suburban and urban areas. Finally, concerning the race demographics of the service, the majority of its subscribers (62%) are Whites (62%). Thus, the demographics of the primary segment of Disney+ may be briefly and graphically presented in the following way:
- Age: 27-41
- Gender: Both male and female
- Race/Ethnicity: Whites
- Political Affiliation: Democrats
- Income: Less than $100,000
- Location: Urban and Suburban areas
Behavioral Segmentation
As previously mentioned, the subscribers of Disney+ are White men and women aged 27-41. Their decision to subscribe is independent or may be influenced by their children’s desire to watch the streaming service’s content. Supporting progressive ideological values, equal rights and opportunities, and social responsibility, they may be regarded as more open-minded individuals who do not have a prejudice against new ideas introduced through audio-visual content. At the same time, due to middle or low income, not all of them can afford cost-inefficient entertainment, especially during the pandemic that has a highly negative impact on the global economy and employment. That is why they choose to pay a relatively small fee to get access to a great collection of films, series, and shows. In addition, people who live in urban and suburban areas are motivated by the accessibility of entertainment provided by the streaming services that fit in their lifestyle. In other words, they prefer to stay at home after a hard-working day indulging themselves with the content of their choice instead of spending time reaching a cinema.
Nevertheless, similar to consumers in other spheres, Disney+ subscribers expect a perfect balance of price and quality, and they are committed to the company as long as their expectations are met. This behavior justifies the highest rates of customer retention when the majority of people retain their subscriptions after six months. At the same time, customers’ loyalty is determined by the company’s efforts to address their demand. That is why only 20% of subscribers have an annual subscription while others pay every month when they receive expected quality. Finally, the service’s customers prefer their expectations to be exceeded and want feel unique – thus, they choose Disney+ that values innovations in the sphere of digital media and offers exclusive content that cannot be found anywhere else.
In general, for the company that successfully implements a four-quadrant approach in relation to customer targeting, it is challenging to identify one VALS type of consumers. However, on the basis of demographic, behavioral, and psychographic analysis, it is possible to assume that the majority of Disney+ subscribers are survivors, strivers, and experiencers. Survivors prefer living narrowly focused lives with few resources to cope and familiar properties that guarantee security and safety. They are focused on meeting needs and do not express a strong motivation. Although survivors may be regarded as cautious consumers, they are loyal to brands that meet their expectations. At the same time, strivers and experiences and enthusiastic and fun-loving consumers motivated by new ideas and possibilities.
In the same way, Disney+ subscribers who choose audio-visual content as watching films, series, and shows may be regarded as one of the basic needs for entertainment and relaxation. At the same time, they prefer the most convenient and cost-efficient ways and classical materials. Moreover, they are cautious testing the service by paying monthly fees and may be strongly attached to it if their needs and expectations are met. At the same time, a considerable number of subscribers are open-minded individuals interested in the latest releases, trendy content, and innovations.
New Market Segments
On the basis of the primary segment’s analysis, it is clear that particular segments remain underserved. The first potential subsegment is Black women and men aged 27-41, with middle income, predominantly with children, living in urban and suburban areas. There are several reasons why these customers should be targeted. First of all, Blacks constitute only 8% of Disney+ subscribers’ total number. At the same time, it is impossible to deny the impact of African Americans on the economy and popular culture of the United States. Their influence is ingrained in almost every sphere of life, including sports, fashion, music, and social awareness. In the present day, it is intensified by the participation of Black consumers in the digital space. They are leveraging open-source innovation and digital know-how to advocate their unique needs. African Americans currently speak directly to brands that consider their demands. Due to their collective presence in the digital sphere and marketplace, Blacks are creating new entertainment-related financial ecosystems. Moreover, attracting the Black audience on the basis of social equality has a positive impact on the company’s reputation.
The shopping habits of Black citizens are shifting as well under the influence of the digital age. According to the Selig Center, in 2022, the buying power of African Americans will rise to $1.54 trillion, and its five-year estimated growth is more than 20% (Grace et al., 2018). It is driven by family consumption and the accessibility of quality products at affordable prices. In addition, Black families are inferior only to Hispanic families in the number of children – in other words, a considerable number of African American parents have more than three children (Livingston, 2015). In almost one-third of states, non-White children and adolescents outnumber all white children (Sáenz & Poston Jr., 2020). As previously mentioned, children substantially influence their parents’ purchase behavior, and families with several children are more in need of audio-visual content for their entertainment in comparison with single adults, especially with an active lifestyle.
On the contrary, another subsegment that should be addressed by Disney+ more intensely is young people aged 15-25, of all nationalities, including Whites, Blacks, Hispanics, and Asians, living in urban areas. First of all, Generation Z constitutes only 22% of the service’s subscribers, and the non-White population is heavily underserved. At the same time, other cultures’ content, especially South Korean series, Black talk shows, and Latino music, are becoming popular all over the world, and other streaming services have already started to address ethnic minorities offering particular content to them. In addition, a considerable number of young people may be regarded as influencers who use social media platforms for producing their own content that may impact others’ opinions. Thus, service-related positive feedback from them may improve the company’s reputation and customer awareness globally.
All in all, a potential subsegment with a greater market potential that should be addressed by Disney+ is Black adults with children. First of all, targeting this audience may improve the company’s reputation as the one that values diversity and respects equal human rights. According to Nielsen’s Total Audience Report, “Black adults continue to spend the most time overall with media—21% more time than the average adult” (Grace, 2020). They spend almost 5 hours with smartphones and live TV per day – thus, a wide collection of Disney+ should attract their attention and form customer loyalty (Grace, 2020). As the majority of Black families have at least two or more children and with a low to middle income, they do not have much time and enough money for cost-inefficient types of entertainment. Thus, they prefer to choose convenient, fast, high-quality, and affordable entertainment for everyone without leaving their homes. According to VALS types, the majority of these consumers will be survivors, believers, and makers motivated by traditional values.
Recommendation
According to the analysis of the market, the company’s primary segment, and customer targeting, it is possible to conclude that this segment may be regarded as highly valuable, and it justifies an extended marketing campaign due to the following reasons:
- Addressing racial minorities improve the service’s reputation;
- Black spend more time online in comparison with other nationalities, and their purchasing power is constantly increasing;
- More children have more influence on their parents’ decision to use the streaming service;
- This segment is motivated by the affordability and convenience of the service and expresses high loyalty in the case of satisfaction.
In general, the major strategies that should help attract an identified subsegment is the availability of Black-related audio-visual content on Disney+. It may include talk shows conducted by prominent Black influencers, conversations with influential Black musicians, athletes, actors, and businessmen, and films with Black actors or directed by Blacks. In general, the service’s content should focus on diversity and the representation of people from various cultural, social, and religious backgrounds. In this case, people will feel that the company aims to satisfy their unique needs and value their differences. At the same time. Disney+ should not target non-White subscribers with particular advertising content on the basis of their race, as they prefer to be treated equally. In general, in order to be successful and guarantee stable growth and development, these initiatives should be implemented on a constant basis.
I appreciate your attention to this subject and hope that this information will be taken into consideration. Please let me know if you have any questions.
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References
Agnihotri, A., & Bhattacharya, S. (2022). Disney: Restructuring for success with video streaming service Disney+. SAGE Publications: SAGE Business Cases Originals.
Dean, B. (2021). Disney+ subscriber statistics 2022: How many people watch Disney+? Backlinko. Web.
Disney + (n.d.). Web.
Fagerjord, A., & Kueng, L. (2019). Mapping the core actors and flows in streaming video services: What Netflix can tell us about these new media networks. Journal of Media Business Studies, 16(3), 166–181. Web.
Grace, C., McCaskill, A., & Scott-Aime, M. K. (2018). From consumers to creators: The digital lives of Black consumers. The Nielsen Company. Web.
Grace, C. (2020). Multicultural consumers are streaming content more than ever as social distancing continues. Perspectives. Web.
Livingston, G. (2015). Family size among mothers. Pew Research Center. Web.
Sáenz, R., & Poston Jr., D. L. (2020). Children of color already make up the majority of kids in many US states. The Conversation. Web.
Tapp, T. (2022). Disney Plus: Everything you need to know about Disney’s subscription streaming service. NEXT TV. Web.