Editor’s note: Leigh Admirand is senior vice president and founding partner at research consultancy Reach3 Insights.
As it prepares to challenge Netflix, Disney is counting on loyal fans to help it make a big splash. As reported by The Wall Street Journal, Disney superfans were invited to the company’s D23 convention this summer to get a preview of its streaming service, Disney+. Consumers who signed up for the service at the conference, or the week after by creating a free D23 account, received a deeply discounted, three-year deal that brings the monthly cost to half that of Netflix or Hulu.
Disney’s decision to engage its biggest fans is a smart move – it demonstrates to investors that there’s real appetite for Disney+ even before it officially launches. For fans, the big discount is a huge plus.
A quick look at the OTT video streaming market reveals why Disney is very keen to incentivize its fans to sign up now. This is a market that’s quickly becoming competitive. In addition to Disney and Apple, traditional media conglomerates such as WarnerMedia and NBCUniversal have big plans to get a piece of the streaming pie.
To get a more in-depth look at the streaming space, we conducted a study this summer exploring current consumer attitudes, behaviors and attitudes in this space. The video and open-ended responses we got from research participants were particularly telling, providing interesting lessons for all marketers trying to build brands in an emerging, competitive landscape.
Familiarity breeds trust
Our study explored the brand personalities of Netflix, Disney and Apple. We focused on these three since Netflix is the biggest incumbent, and Disney and Apple are the two up-and-coming challengers.
Among current players in the space, Netflix is the most popular and most liked. Our study found that 87% of video streamers are subscribed to Netflix, 59% are subscribed to Amazon Prime Video and 47% have Hulu. Interestingly, when asked which streaming service is their favorite, Netflix remains on top (62%) by a long shot, but more people pick Hulu than Amazon (17% versus 8%).
We found that familiarity is a big factor to Netflix’s favorability. Consumers used strong, fun descriptors to talk about Netflix and associate the brand with respected, innovative personalities like Barack Obama, Einstein and Taylor Swift.
“It is fun, rewarding, unique and a good experience,” said one research participant when asked about Netflix’s personality.
There’s a lot of reasons why Netflix is so popular, but the company’s broad appeal is certainly a big factor. Netflix has become a master of variety, offering a wide range of content that enables it to capture the attention of a big audience. Whatever type of shows you’re into, Netflix probably has it. Consumers like that they can watch what they want, when they want. They talk about “watching Netflix” rather than watching a show or movie on Netflix – something that’s unique to Netflix, we found in our study.
A strong brand can be a double-edged sword
Disney is a new player in the streaming space, so it shouldn’t be a surprise that people’s feelings about it aren’t as passionate as for Netflix. However, we also found that Disney’s long history in creating content for younger consumers is shaping perceptions of its upcoming streaming service – but not always in the way the company probably wants.
For example, a couple of research participants said Disney’s brand personality is similar to Miley Cyrus, but for two very different reasons. “Young, hip and a little edgy,” said one, but “Chirpy, preachy, highly inappropriate and claiming to be authentic,” said another.
To be fair, it looks like Disney is actively working on this issue: much of its marketing so far has been focused on Marvel and "Star Wars" – content that will appeal to older viewers.
Disney’s decision to pull its content from Netflix is also a sore point for some streamers. One person said the company is like “a spoiled toddler who doesn't want to share his toys.”
Current brand perceptions about Disney demonstrates why companies should continuously invest in tracking and monitoring perceptions about their brands. As your business evolves or as you decide to pursue new markets, you may find that some of the brand attributes that gave you the advantage before may become points of weaknesses in the future.
Mystery can result to polarizing feelings
People still have a lot of questions about Apple’s upcoming streaming service, and this mystery is resulting in vague and often polarizing feelings about the brand. On one hand, some consumers think Apple is popular, confident and intelligent – someone like Oprah and Barbara Walters. But on the other hand, some people think the brand is greedy, aloof and unnecessary – just like Paris Hilton and Ross Geller from "Friends."
One respondent sums it up well: “It would be like a blind date...might be awesome, might be crazy.”
The big range of adjectives people use to describe Apple is consistent with the brand’s history: it has a lot of fans but also a lot of haters. Non-fans see Apple’s plans to enter the streaming war as greedy, given that the company already has successful businesses in the PC, laptop and music-streaming markets, just to name a few.
I suspect that as Apple reveals more about its streaming service, consumer perceptions will improve. After all, this is a brand with a strong user base and a track record in creating great products. They also have some impressive Hollywood stars on the roster, like Steven Spielberg, Steve Carrell and Jason Momoa. But in order to avoid lagging too far behind Netflix and Disney, Apple needs to reveal more sooner rather than later.
Brand perceptions for Apple show the importance of understanding both your company’s fans and non-fans. Investing in ongoing market research to uncover what motivates these groups and how they perceive you can provide good insights on your competitive landscape and how you can win.
Emerging market
The streaming war is just heating up, but as our study proves, this is a young, emerging market that will be the subject of future business-school case studies. Marketers should pay attention to what’s happening in this market now as it offers plenty of lessons for all industries.