Disney is probably far from worried about hitting its goal of 60-90 million Disney+ subs by 2024.
For one, the company in May revealed it already hit 54.5 million Disney+ subs.
And more recently, it was reported that Disney+ had stopped offering free trials, which is something that a service desperate for growth wouldn’t do.
But even if subscriber growth is going well at the moment, the question arises: Why now?
Free trials are ubiquitous customer acquisition tools in the video streaming space, and ostensibly as valuable as ever in the coronavirus era where consumers are cooped up in their homes and streaming video at abnormally high rates.
So wouldn’t it make sense for Disney+ to keep trials at least through the end of this year, as the WHO doesn’t expect a vaccine ready until at least 2021, to be best positioned to capitalize on social distancers?
The first sensible reason for Disney+ free trials to go AWOL is the upcoming “Hamilton” premiere. Disney, which secured the rights to the recording of “Hamilton” for $75 million in February, is forgoing theaters and debuting the Broadway phenom on Disney+ on July 3.
And that’s likely to ratchet up engagement on Disney+ and cause some Broadway heads to sign up for the service and recapture the magic: “Hamilton” has won 11 Tonys and grossed over $600 million in sales since 2015, making it the 7th most popular Broadway musical of all-time, according to The Wrap. Tickets (that were reasonably priced) for “Hamilton” were also notoriously hard to come by, which could mean there’s a sizable second audience eager to see “Hamilton” for the first time at a much cheaper off-stage rate.
So without free trials, Disney+ has the chance to lock in some “Hamilton” fans that otherwise would have freeloaded (free trial-ed and cancelled) to view it on the service.
This is especially valuable for any attempt by Disney+ to attract older consumers. Exclusive data provided to VIP from YouGov suggested that Disney+ was most popular among Gen Zers (consumers aged 20 or younger) in April. Meanwhile, the average age of a Broadway theatergoer was 42 in the ‘18-’19 season, according to the Broadway League.
Another reason Disney+ might choose to axe its free trials at the moment rather than next year is to help goose sub numbers before November.
There’s likely a batch of consumers with Disney+ access that would have already ditched it had they not signed up for a one-year subscription last fall when the service first launched. Some consumers within this batch may have concluded there isn’t as much replay value with the Disney vault as they originally anticipated, while others’ frustration may primarily stem from a perceived lack of must-see Disney+ originals following S1 of “The Mandalorian,” easily the service’s most successful original to date.
But S2 of “The Mandalorian” is set to drop October 2020, according to Bob Iger. And similar to “Hamilton,” although maybe to a lesser degree, Disney+ in late October could gain subscribers (for at least one month) that otherwise would have signed up for a free trial to see some of S2 of “The Mandalorian” and cancelled.
This might help cushion sub numbers in the face of consumers cancelling Disney+ after their 1 year trials end in November. Doing this could better position Disney to make some sort of grand subscriber growth announcement come its one-year anniversary on Nov. 12.
Disney may not be the last major streamer to experiment with cutting free trials, as the video streaming industry looks to deal with rising cancellations. The rate of churn for SVODs reached 35% in 2019, a figure up 25% annually, according to research firm Parks Associates.