A streaming platform from a leading media company has shied away from hosting shows and movies that go past the PG-13 and TV-14 ratings. That appears to be changing and could have an impact on churn and subscriber growth.
What Happened: The Disney+ streaming platform from Walt Disney Co (NYSE:DIS) has long held a standard of not airing R-rated movies or TV-MA, which is a big difference from rival platforms.
Outside of the U.S., some of this “mature content” gets labeled as Disney+ is part of its Hotstar offering because Hulu is not offered in certain countries. In the U.S., the majority of Disney’s owned R-rated show and TV-MA content ends up on Hulu, a streaming platform the media giant owns 67% of along with Comcast Corporation (NASDAQ:CMSA), which has a 33% ownership stake.
Mature content is headed to Disney+ in the U.S. soon, which has led to a complaint from the Parents TV and Media Council.
Shows including “The Punisher” and “Daredevil” from Marvel originally aired on Netflix Inc (NASDAQ:NFLX) but are now back in Disney’s streaming control, leading to a decision to put them on Disney+.
Marvel shows “The Punisher,” “Daredevil,” “Jessica Jones,” “Luke Cage,” “Iron Fist” and “The Defenders” are all rated TV-MA and were added to Disney+ on March 16, 2022.
Users are prompted with a new window when they open the Disney+ app, which then asks for a password and to confirm that TV-MA content is okay.
The complaint from Parents TV and Media Council said the move to add mature content could “destroy your brand” in a letter to Disney.
“For more than 98 years, the Walt Disney Company has been synonymous with the words Family Friendly, and I can think of no other corporation in American history that has been built more squarely on the backs — and on the wallets — of parents and families,” the letter said.
The letter called the move by Disney “off-brand” and a move to boost subscription revenue without worries of being family-friendly.
“So what comes next, adding live-striptease performances in Fantasyland at Disney World?”
The letter also applauds Disney for improving its parental controls.
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Why It’s Important: Adding mature content could boost the subscriptions for Disney+, offering more content for adults. The platform has faced criticism that outside of the Star Wars shows, the streamer lacks content for adults without kids.
Disney’s acquisition of 21st Century Fox gave it ownership of the “Deadpool,” “Alien” and “Die Hard” franchises. Currently, Disney only puts the R-rated moves on Hulu. The new move to add mature content on Disney+ could lead to more 20th Century Studios (the name changed in 2020) movies joining the platform.
Rival streamers have had success airing content geared to adults along with kids’ programming. Some of the most successful shows on Netflix are rated TV-MA or are original movies rated R.
Top viewed shows on Netflix, including “Squid Game,” “Bridgerton,” “The Witcher,” “13 Reasons Why,” “Maid,” “You,” “Tiger King” and “Sex Education,” are all TV-MA.
While the move to add the Marvel shows rated TV-MA doesn’t mean Disney is going all-in on adding adult content, it signals a shift in ideology and the possibility of adding more content to appeal to adults.
Disney ended the recent quarter with 129.8 million subscribers for Disney+, up 37% year-over-year. Domestic subscribers of 42.9 million were up 18% year-over-year.
DIS Price Action: Disney shares are down 0.036% at $138.11 on Thursday morning, trading within a 52-week range of $128.33 to $196.59.
Photo: Courtesy of Marvel
