Kevin Mayer had a fairly simple reason for the technical problems that Disney+ experienced shortly after it launched: It was a coding issue within their own platform.
“Some limits to the architecture that we had in place were made apparent to us,” Mayer, chairman of Disney’s direct-to-consumer and international business, told Recode’s Peter Kafka during the Code Conference in Hollywood on Tuesday. “It had to do with a way we architected a piece of the app.”
Disney’s new streaming service ran into tech issues for many customers soon after launching early last Tuesday morning, delaying their ability to watch their favorite shows and movies after months of anticipation. Eager customers shared several different error messages on Twitter, with some users being met with an “unable to connect” alert. Others were greeted with: “Error. Sorry something went wrong. Please try again later.” And that was for the customers that were lucky enough to even get on Disney+, with some saying they ran into tech issues just trying to sign up.
Disney still was able to get more than 10 million people to sign up for the new service.
Mayer said that even though BamTech had extensive experience with streaming live events, they had never dealt with anything like the demand they had last week. He assured Disney fans that they’re working to “recode” the app and they’ll have updates over the next week and half. “We were surprised by that,” he said of the high volume of people using Disney+.
Speaking of those 10 million first-day signups, Mayer said that even they were surprised about the robust number. “Holy cow,” is how he described the reaction from their Burbank-area offices. “We were very surprised by the size and magnitude of the demand, for sure.”
Disney won’t share any hard subscriber count — those 10 million sign-ups included those who had a 7-day free trial and included some of those outside the U.S. including The Netherlands and Canada — until its next quarterly earnings in early 2020. Mayer was asked if Disney, like Netflix, will start to be judged solely on subscriber numbers rather than on profits on earnings.
“It’s story likely for our direct-to-consumer business, for awhile,” he said, describing subscriber numbers as “the coin of the realm” when determining streaming success. Though he added, “even direct to consumer services are expected to make a profit.” Disney has signaled 2024, the year it expects to have 60-90 million subscribers globally, for when it will achieve profitability.
He also said that year would be a reasonable goalpost to begin sorting out the winners and losers from the streaming era. After all, Apple TV+ and Disney+ are in the first few weeks of their life, and HBO Max and Peacock are coming next spring.
“Not everyone is going to succeed,” he said. “The story will start to be told within the next couple of years.” He thinks the average consumer will have somewhere between 3 and 6 streaming services.
Mayer also touched briefly on the price-hike — the second one this year — for Hulu Live.
“We have to be in businesses that ultimately turn a profit. The programming we have on the live TV bundle is quite expensive,” he explained. “For us to reasonably make a profit on that, we had to increase the price.” He added that Disney remains invested in offering live TV channels via streaming, despite the overall sector having difficulties (PlayStation Vue was abruptly shut down last month).
“We’re not going out of business,” Mayer said.