We Fixed It, You're Welcome - The Disney+ Magic Equation With the Man Who Built It

Episode Date: October 14, 2025

This week on We Fixed It, You’re Welcome, we’re diving deep into one of the most fascinating business stories in streaming: the Disney+ crisis. From explosive subscriber growth to public backlash and strategic pivots, Disney’s streaming platform has seen both magic and mayhem. Joining us is Michael Cerdá, the former VP of Product at Disney Plus, who helped take the platform from concept to over 100 million subscribers. Michael gives us a rare behind-the-scenes look at how the service was built, why key decisions were made, and what Disney can do now to win back its audience. We break down: • The launch chaos that almost broke Disney Plus • Why bundling Hulu and ESPN+ was a last-minute gamble • The subscriber exodus and backlash over pricing • How personalization and AI could reshape streaming • And our fix for Disney Plus retention and acquisition strategies Whether you’re a media strategist, streamer, or just love a good comeback story, thisone’s packed with insight. ✅ Key Takeaways: • Bundling works—even when it’s messy—because it locks in lifetime value. • Personalization is the next battlefield in streaming retention. • Disney’s loyalty ecosystem is underleveraged but powerful. • AI could usher in a new era of storytelling, putting the viewer at the center. Guest Plug: Michael Cerdá’s book Build Something is available on Amazon and Barnes & Noble. It dives deeper into Disney Plus’s launch and other major product stories. Subscribe for more deep dives where we fix big business problems with fresh perspectives. Links: • Website – www.wefixeditpod.com • Follow us on: Instagram – instagram.com/wefixeditpod LinkedIn – linkedin.com/company/wefixeditpod YouTube – / @wefixeditpod If you liked this episode, don’t forget to subscribe, leave a review, and share it with your friends! Keep listening to find out how we fix companies and put them back better than we found them. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info. Learn more about your ad choices. Visit megaphone.fm/adchoices

Welcome to We Fixed It. You're welcome. The show where we take over companies, you come along for the ride, and we try to put them back better than we found them. Welcome back to We Fix It, you're welcome. Today we're tackling a meteoric rise to glory, a controversial falling out, and the suspense of what will happen next. Ooh, sounds like a good movie. It's actually the Disney Plus story. Disney's popular streaming platform hit a snag lately when a reported 1.7 million subscribers canceled in protest, with Disney. than a week. And when they tried to come back, the subscribers found it wasn't as easy as they thought it would be. There is more to this too. So if you think you know this one already, buckle up. Can we fix the delicate balance between corporate interests, shareholders, and subscribers, and make sure everyone gets what they want? We're sure it's heck going to try. That's what we do. To help us unpack all this, we are joined by someone who knows Disney Plus well because he and his team essentially built it. Say hello to Michael Serta. Michael is a chief product,

technology officer, most recently an author. When he was VP of product at Disney Plus, he and his team played a pivotal role in its global launch, scaling the service from its concept to 100 million plus subscribers and $4 billion in revenue within just three years. Boom. And he's done more than that. So why don't I let him introduce himself? Michael, welcome to our show and tell our listeners a little bit more about yourself. Thanks, Aaron. And hey everybody, it's great to be here. Yeah, so I joined Disney about a year before Disney Plus launched. So I got there just in time to like put fingerprints on what the product was going to be, what we were building for who and over what period of time,

and sought through just over the 100 million subscriber mark like you mentioned. And what a tremendous experience that was. And I've been doing sort of media work for many years, building streaming services. And, you know, I built Vivo back in the day. I was at MySpace once upon a time at Facebook. I worked on Facebook live, you know, how people go live on Facebook if you still use Facebook. That was my team as well. So I have a sort of a long history of doing content like video stuff, media stuff.

And, you know, and I love to build. And I guess the one thing I should say is my job is always to build for the consumers. So when you, Aaron mentioned earlier, the various stakeholders in a Disney situation, like, you know, you got the shareholders. you've got leadership. And man, if you've got all these different stakeholders, I'm always the one the voice of the consumer, right? And so that's, and I anchor there for a living. And it's sort of one of those for better or worse things.

And you'll hear why as we get into the conversation. Thanks so much, Michael. We're really glad to have you here. And no doubt you'll bring a different vantage point than the rest of us. So can't wait to hear what you have to say. Kadeira, our listeners may know the headlines of the story, but you've come up with some stuff for us to really sink our teeth into.

Yeah, yeah, yeah. Especially with Michael's involvement. So Disney Plus, why don't you fill everyone in on what's happening and what we're going to talk about? Absolutely. So let's, first of all, give credit where credit is due, right? When Disney Plus launched in 2019, it came out swinging. We're talking about Marvel, Star Wars, Pixar, all that good legacy Disney content that we all love, all in one place. And within 24 hours, they had 10 million signups.

unbelievable. And then you think about the pandemic which pushed things into overdrive, right? Disney Plus really became a lifeline for a lot of us. It was all things comfort channel. But, you know, as you talked about, fast forward to 2023, 2024, that's when that story starts to shift. As you said, subscribers are way down. Global growth is slowing. And, you know, over time, we saw those leadership shakeups. We saw this new focus on profitability and the inevitable price hike. we're going to talk a little bit about. But those price hikes are actually, as much as they're a part of the problem,

they're also part of the plan. So let's break this down, right? Because revenue is up, and how is that? Well, revenue's up because they raise prices. And while that might mean fewer subscribers, those who stayed are paying more. So Disney Plus is making more per user, but their base is shrinking.

So now the whole strategy is shifting, right? It's no longer just about subscriber growth, we're talking again about profitability, retention, getting those loss users back, as you said, Aaron. So how is Disney Plus trying to win people back? What are they doing? So they're doing a couple of things. They're leaning harder in the bundles, essentially think like you get a better deal if you stay in our ecosystem, right? It's a classic retention tactic.

Think more value, less churn. The next one's interesting, right? So they've launched a loyalty-style perks program. That gives members things like early assets. access to movie releases. We all love early access. Discounts on merchandise, sweepstakes entries, partner offers, things like DoorDash. So it's basically the streaming version of a frequent flyer program, right? Keep paying your subscription. Okay, here's a little something extra. And then third, and a lot of folks had some response to this, Disney is

cracking down like so many other streamings on account sharing. So while this might drive some people away, it actually opens a path to offer new lower cost tiers or, you know, think about maybe something like add a member pricing versus, you know, sneaking and sharing your accounts on the back end. Now, the media strategy twist here is they actually are considering reporting fewer subscriber updates. Can you blame them? Again, that number is down. And kind of changing how they're reporting performance altogether. So what this signals to me is this shift from hey, we're growing like crazy to we're making money and we're keeping quality subscribers. Now here's the thing. Winning subscribers back in 2025 and for the foreseeable future is not going to

just be about pricing or perks. It is about perceived value. And I think that's where Disney Plus has a real challenge, right? People are burned out on content. They've already seen the big Marvel, the big Star Wars releases. And Hello Economy. most folks are cutting back on monthly costs. And the loyalty to anyone's streaming service, forget about it. So if Disney wants to keep people around, they're going to need to do things a little bit differently. And Aaron, that's what you said. That's what we're here to fix today.

Simply put, we want to help them win back subscribers who bailed and keep the ones who are thinking about it. So that's what we're going to talk about today. Let's get into it. So retention and acquisition, no big deal. No big deal. Well, and I also think that right now, I mean, Kadira, you've touched on it. I love the context that you've provided because it's a very complicated and complex business model, but it's been a perfect storm of trust erosion.

And so when we talk about retention, and Michael, I'm sure you're going to speak to this as well, as somebody who is very customer-focused myself, I think that it's just this cascading of things. failures that signal a deep disconnect with Disney Plus and its consumer base and the customer profile, right? So we have the whole cancellations through the Jimmy Kimmel catalyst, you know, the censorship issue, whether it's perceived or real. It was it was more than just a content complaint. So for that segment of audience, it was a breach of a brand promise. You know, Disney Plus is sold as home of your favorite stories, a trusted almost sacred space. And so, when something like this happens, it kind of shatters that trust.

It makes its service feel political instead of magical, like the Disney Kingdom. And then on top of that, you know, within a very short time period, within less than a week, to get the tone-deaf price hike for the bundle of Hulu and Disney Plus for all these people that just canceled, seemed like, okay, you had a marketing campaign already ready to go, didn't you? and were you not reading the room? Were you not seeing everything that was happening and that loss? You know, so just felt like we're not listening and we feel we can charge you regardless of the situation. So it's not just bad timing.

It's a complete failure in customer sentiment analysis. And so I'd love to hear, Michael, from your perspective, like, what are the types of signals that they listen to in order to kind of set these calendars into motion? And was it something that they couldn't stop? Yeah, and take us back to the beginning, too, if you would. Oh, yeah, sure. I mean, look, and I think, Kedar, the way you set it up was great. And as you were describing it, I was remembering it. Like, I was like pick up.

It was like a flash back to the whole thing. And, you know, and Aaron, you mentioned, I think, yeah, 10 million subscribers we got the first day. I mean, I was literally launching it. I was in our San Francisco office, right? And I had a hotel nearby because I didn't live right. in San Francisco. And we launched, we started launching it around midnight. And the way you do these launches is you launch first on one platform than the next.

So like web would go first, smoke test, make sure everything's working. Go to iOS. You go to Android, Samsung, et cetera, right? And by I think 4.30 a.m., we were done rolling out. And we were literally drinking champagne. And I was like, okay, everything's good. And I was watching this dashboard that we built to see who was watching. what in the middle of the night, right?

And everybody's watching The Mandalorian. That was by far the thing that everybody's watching first. And then Frozen was the number two. People like literally stayed up into the middle of the night to watch this, right? And we were launching West Coast. So we're talking midnight to 4.30 a.m. watching the West Coast.

And we're watching where else in the world, you know, things are lighting up. Anyway, I finished my probably third glass of champagne and I go back to my hotel, feeling good. Head hits the pillow, not an hour goes by, and I get a call. from my boss. And he's like,

Serta! He's like out of like a cartoon phone, you know, thing. And I'm like, yeah. He's like, did you hear? We're down. I'm like, no, I'll be right there. So throw the same clothes I had back on.

It's now like almost 6 a.m., right? I get down into the office. And I see what's happening. And literally the app was degrading. So you know how when you launch any streaming app, you see all the tiles of the content. the tiles started disappearing one by one. It was one of those graceful degradations, like melting away, right?

And I'm like, oh, my God, what's happening? And I'm thinking, you know, and I was the head of product for this, not the head of engineering. That's a different person. But it's still on me, and I still have to know what's happening. And I got to help figure it out, right? And what was happening was there was a back end failure. And I think our CTO at the time was capitulating that, like, oh, we broke the Internet. We're so popular. No, we broke ourselves.

I think that's the news that got out was the servers crashed and overwhelming demand. Right. You can spin anything. Yeah, exactly. And actually, we were kind of down for a few days. We didn't have it figured out. And what it was was there was a back end API. It was called the search API. And the search API is supposed to, you know, when you go to the search box and enter Frozen, Frozen comes back and you select it and you watch it. That's the search API. It powers that functionality. Well, in this case, the search API was powering. Not only the search function, it was powering continue watching. Like if you started something, like how do you pick up, backup where you left off

or recommendations recommended for you, there's always a row that's recommended for you, powered that too. So because that was not pressure tested and probably didn't have the best QA on it, it's hard to QA something like that, honestly. Sure. Yeah, it failed. And so we went down. And I remember a couple hours later, we're in this conference room.

And you got Bob Eiger on the phone. You got like Kevin Mayer. You got these big guys. And people are screaming at each other. So part of Melissa, you were getting at something. And I want to circle to it, which is like, how does the orchestration happen in places like this? And I think we give it more credit than is due because there's more by the seed of the pants than you would imagine. Everything comes in hot.

It's like when everybody wanted to. to do the Disney bundle. That was an 11th hour before we launched. Oh, my God, now we got to do the bundle, the Disney bundle. It came in so hot and we're like, we were barely going to make the launch target as it was. And now you're throwing this on. And you've got to think about this. The Disney bundle.

You got Disney Plus, Hulu, ESPN Plus. These all resided on different technology stacks. Right. So think about the horrible experience. It's going to be for a consumer that actually tries to get one. So if you were one of those people that had Hulu and you wanted to just upgrade to the bundle, okay, fine. You go into the Hulu, log into Hulu, get to my account, blah, blah, blah, hit the upgrade button, right?

But then you go to Disney Plus to open that up and log in and you can't log in. Because Disney Plus doesn't know what that login is. I remember that. I'm not. And I'm like, whoa, whoa, whoa, do you got, does everybody really want to launch something that's going to be this unstable for people? Like, we're going to get hammered in customer service and sentiment that all these. things. We're going to get so hammered here. Do we really want to do this? And it was like, everything was very top down. That's the way it goes there. Right. So it was like, no, just do it,

get it done. And we found ourselves stitching together like for that scenario that I described about the login thing, for example, we built this thing that was called the eligibility service. So that if you were that person that got it on Hulu, at the end of the day, we'd send a batch communication to the Disney stack to make them aware of Melissa.e.t.eaten at Gmail or whatever you're Email would be. And then what happens in those like 20 hours before that's passed, right? It's like all customer service and customer service can't really fix anything. They got to ask for patience.

And anyway, it was one of those great big like conundrums. However, it worked from a business perspective. They were right. Yeah. From a business perspective. Because we learned later that those that had the bundle had longer lifetime value LTV. Right. And less propensity to church.

because they're so loaded. They've got all these things, all these services now. And so, look, it worked. It was the right thing to do from a business perspective, a horrible thing to do from a consumer perspective. But if I could do it over, I think I'd probably do it the same way. I wouldn't have held off because there was so much value creation. And so I guess at the end of the day, some of us have to take our utopian hats off and go, what's the value? This is an enterprise, right? And so it's about value creation for shareholders at the end of the day. It's a tough one, you know? Yeah. And so I guess what I'll close this segment with, I guess, is as consumers, we all, and you guys do this every week or on your podcast, you know, you're looking to fix these things for corporations. It's easy to look from afar and say, oh, they should just do X, Y, or Z. But when you're in those shoes, it's a very different set of circumstances. And usually when something doesn't make sense, there's a pretty damn good reason that doesn't make sense. Yeah. Yeah. Yeah. Well, that's why we do what we do. we can talk and critique from the outside.

And we're not always talking to the person who is there, in this case we are, which is fantastic. But I do think that Mo was smart at launch to do the bundling, even if it was an 11th hour inclusion, because you have the real value, right? So you have the access across the ecosystem. But you also have perceived value of like, okay, I don't walk ESPN all that often.

But now that I got, now that I have it, maybe I will. And I'm not as familiar with Hulu's programming, But maybe now that I'm exposed to it, I'll become part of what I watch and built into my habits, you know, my viewing habits. So I do think, you know, even though it was a let's get this done and figure it out later, it did work to your point. Like it got people hooked on the, not just the one channel, but the ecosystem. And I think it probably positively impacted the subscriber adoption at that point. I also think one of the things that we've seen and we've talked about this on this podcast a lot is, the savviness of consumers today, right? The savviness, as well as the impatience, right?

Customers want things immediately and they want it personalized, right? They want, you know, when you go to DoorDash, when you go to Starbucks, whatever, what did I order last time? I want the same thing. I don't, you know, da-da-da-da-da-da-da. And so I do think the interesting challenge, and Michael, I love that you're here so you can talk to these things, but the interesting challenge is this bundling of ESPN Plus, Disney Plus, and Hulu are, they're pretty dynamically their own thing. So when you bundle them, like ESPN Plus and Disney, like, what? Like, really? Okay.

So I feel like there's an opportunity, and I'm sure they're working on this directly, but, you know, this algorithm from a catalog librarian into more of a person. tour guide like Aaron you just brought this up like a recommendation engine so it and making it not feel so generic but may be much more in tune with what you're watching right and so how can they do that transferring these different customer experiences across the different venues right and make it seem like one cohesive experience for the customer so not just you're watching Mandelorian, so here's more Star Wars, which

is just, that's easy. That's an easy, peasy thing. But more like, you just binge the bear, which is on Hulu, right? And here's some gritty documentaries on National Geo that you might really like, which is on Disney Plus, right?

So, like, kind of like making that connective tissue there makes the catalog and the library feel more curated and personally relevant. which I think is also something that people want in these streaming services. Because you're mentioning all the history of like, now there's so many streaming services.

And, you know, like before it was just Netflix, you know, now it's like everybody. So I think that there are ways in which Disney Plus can capitalize on the things that other services do well. The other one that HBO Max learned is they have a reliable release calendar. Right? So every Sunday evening is when you're going to get the next drop of any episode on, you know, so Gilded Age, the pit, like all the things that are on HBO Max, right? And so instead of making it a

random day, every, everything is on Monday, some are on Monday, some are on Tuesday, some are on Wednesday, you know, like make it so that it's something that the customers can feel very confident in and build that trust and loyalty. And so, and make it an event. So I feel like there's a lot of opportunities for them to prioritize operationally things to help with churn and long-term engagement. Because in my mind, the verticals between Hulu and Disney and ESPN Plus are somewhat different, right? And like I love some of the, you know, like some of the shows on ESPN Plus. I'm a big sports fan. And so like how do they transfer over to Disney Plus? How do they transfer over to Hulu, right?

Like, how can you, you know, kind of meld those together? But I think that's one of the ways they can maybe fix operationally some of the things that they've been doing. Yeah. One thing I was going to mention was I remember, you know, we always, we're all based in the U.S., obviously. So we think about all of it from our perspective in the U.S. In other regions, though, there's a different story. So like in the U.K., for example, we launched Disney Plus, and then we launched Hulu wasn't in the U.K., right? and we were trying to get there. Internally, we were trying to beat the Hulu people to go international

because we wanted everything to be on our Disney stack. That's the way it was going, right, politically, internally. But instead of letting Hulu launch in the UK, we decided to launch something, a new brand inside of Disney Plus called Star. And Star was essentially Hulu content. And so you had an additional tile. You know, when you log in at Disney Plus, you see those brand tiles.

for the top. We added another one for Hulu, and we resized them so that all fit. And, you know, we went there first because the guy that was running the UK was like, hey, we're dying over here. People are signing up, but then they're churning like crazy after they watch the Mandalorian season one, right? And it just, there wasn't enough to hang on for people there. So there was this another 11th hour, like get it done now kind of situation that happened

whereby we were going to start launching this Hulu content inside of the Disney Plus. app. And one thing I remember Bob Iger saying, and I'll never forget this. It was just such, he, in this guy, by the way, I know he gets a bad rap in the press lately, but like, this guy's got such panache, you know, he was so cool. He just like, honor the brand. Like, that was it. Honor the brand. And so, and so there we were about to not honor the brand for the first time. And I was like, what are we doing? Because what's going to happen is, do you want your eight-year-old to, like, stumble on the Pam and Tommy show, right? Like, that would be not good for the brand.

Sure. So I sort of flagged, you know, some of these things as the product guy, that's been my job. And so I created work for myself in my team. And all of a sudden we had to build all these parental controls. And then we had to build this entirely new experience so that the day this all happened, when you launched Disney Plus, we had a splash screen that said, hey, star content is coming. Would you like to continue and add it to your Disney Plus account? Are you sure? Are you really

sure? Please enter your password, you know, to make sure. Would you like to set up parental controls? And there was all kinds of knobs on that that we had to build as well. But look, the problem is, and it gets to personalization to, Melissa, content like Disney and Disney Plus, it's harder to personalize. When you think about the personalization thing, what really drives that is our viewing habits, and the metadata around it. So the metadata, for those that haven't heard that term, is like, okay, what's the title of the show? What's the synopsis? What year was it?

Who was the producer, the director, right? The cast kind of thing. What's the rating? All of that is basic metadata. And when you think about what the metadata could be for Frozen, okay, there's probably another hundred titles that could overlap in that metadata realm. So maybe there's a hundred things I can recommend for you. But there's not a million of them, right?

And so it gets challenging. So all catalogs aren't created equal from a personalization perspective. And so this is why, from an information architecture perspective, we launched with those brands titles because we knew already that a Star Wars fan wasn't necessarily a Marvel fan. But when you think about it, action and space and futuristic and all, those things overlap cleanly, but those universes are very different universes. So the model kind of breaks. So it's not as easy as you would like.

So I think the way forward here, though, is to get more tuned in to somebody. I mean, I love the appointment viewing. The Sunday night thing, HBO's had that forever. That's always been great. And you still love that. And they're still, they're probably one of the best from a content perspective, right? It seems like, whereas Netflix is a bit watered down now. You don't see a house of cards and love nature of anything anymore.

I think the stuff they're churning out is like, no pun intended, is like just good enough to keep you, you know? Right. It's like, it's not on fire. It's not like, oh my God, this is like House of Cards or whatever, right? Level. It's like just good enough. And so you kind of, when I look at Disney Plus, I think one way forward for them is to get more in tune with some of the basics like what time of day am I viewing? What day of the week is it? If I'm in the middle of a series, how about honoring the fact that I'm in the middle of that series and just getting me back into it? Don't bury it three rows, four rows deep. The editorial people always want to, want to bury it because they want you to see all the other stuff they got. Right.

Because they're paid on that axis, right? But there's a fallacy in that. Like, because wait a minute, I'm in the middle of the series. Get me right to that, you know? Well, it blew my mind when Netflix went into original content, especially at the beginning when you're, to your point, the quality was really high up there. And, but Disney used to have something called the Disney Vault, where they, they would release something every so often like a solar eclipse. Like now you have a chance to buy this title and then it's going to go away for a good long time.

The Disney Plus launch was essentially was the opening of the vault for the first time. But I wonder if, and you talked about the Mandalorian being the draw or the primary draw, Netflix also set a precedent for original content, which is what blew my mind. It's like conceivably before that point, you have access to every movie ever made for the forever. You know, and then when they come out, you'll get them on Netflix. But they started producing original content, which is really overtaken, for the most part, the content that they, the library content they put on there. If Netflix hadn't set the precedent of you can come to expect original content, that's going to be the draw and everything else is kind of backfill or, you know, it'll substantiate your subscription. Do you think that there would have been such an emphasis placed on Mandalorian or an original series for Disney Plus?

It's hard to say. You know, look, Mandelorian wasn't the only thing that launched as an original. There was a Jeff Goldblum thing on that GEO. There was like there was a new Marvel series. There was a couple of new Marvel series, which were really, really good, actually. So it's hard to say. I think everybody wanted to lean into those originals because, and the editorial people would always put them in the hero at the very top of the app too, to get people to view them and know about them. Because everybody was authentically worried that we would be aging out quickly, you know, that we were really just this family, this little.

kids brand. But what we learned was interesting. Sure, you had the, I remember our segmentation, our audience segmentation analysis. And I'll never forget, like, you had households with young children, households with not so young children. You had young women in their like 20s as a huge segment. Because they're watching Lizzie McGuire all over again, right, that they, that they watched when they were like teenagers. And then there was like, like, Star Wars fans. or something. Yeah, it was something like that in the breakdown. And so it's very diverse. And but this all leads back to why this bundling has to happen. It's required because, you know, look, in the economics changed. Because I think when we launched everything was about top line growth. Go, go, go, go. But that's when Netflix was still growing. And one day Netflix kind of stopped growing top line and it became all about ebitant profitability. The rules of the game changed. And this is why you're seeing the price hikes and the things that, you know, because that's what mad.

now and that's what the street's looking for. And it's, you know, kind of kind of a little bit of the way it goes. And, you know, and to the point of originals, I'll tell you something interesting. So I spent a little bit of time this summer with the people that bought Paramount. This is like David Ellis and Jeff Schell, you know, from Skydance and Cindy Holland as well. And Cindy Holland is actually the person that did originals at Netflix. She launched that. So she did like Orange is the New Black.

She was like that era of Netflix. She's now Paramount. So now I'm, and one of the things that David said to me was David Ellison, he said media companies always got the same thing wrong, which is they never brought the product, which is like my role. So I loved hearing this. They never brought the product people to the same table as everybody else. And it's as if they looked across this lake and they got into a boat and they sailed to the middle of the lake and they sailed to the middle of the lake. They just figured out to get to the other, how to get to the other site, whereas Netflix was very tech-centric and customer-centric at the very beginning. So it was more of a tech company than a content company in many ways at the beginning.

Right. And so they had a better balance. And so the tension between the content people and the product people was just at a higher quality level at Netflix. And whereas at the media companies, the product people have always been like the back office, almost like IT. Like, hey, you're the execution. We want to do X, Y, and Z, and you need to do it by, you know, October or whatever, right? And so anyway, what impressed me, what David's saying is he's trying to build a tech first or a tech-centric, you know, thing at the new Paramount. I don't know if now that he's in the saddle and has to live with it every day and all the pressures and the circumstances that come with it, if that's really going to rule the roost or not, I hope it does.

But it'll be fun to watch. that's for sure. Kadir, can we talk about price hikes as a strategy and whether that's fair to customers? I know it happened to me where I was on, I got Hulu and I've got Disney Plus and then I was on an annual and then they said, it's better if you go monthly, actually. And so I did that. And then the monthly raised like a week later. And Kedare, can you talk about what the customer, you know, acquisition retention,

what happens with the price hikes as an ongoing strategy? Well, I think that the, you know, operationally, when you, you know, you increase and you switch costs, you have to understand what's the perceived value of doing that, right? So like, I don't think that people necessarily are always like, I don't want to pay more, but they have to feel like they're getting something for that. So, like, I loved Erin when you brought up because I have a household that loves old Disney, old Disney stuff. My kids are much older. Like, Michael, you were talking about, they're like the Lizzie McGuire stage, you know, and the old Disney shows. And I think that we've talked about this before, this idea of even

implicated scarcity. Okay. So Disney has always been known for like dropping from the vault a movie, but it's only going to be on there for a short amount of time. And I think they should lean into that. Like I honestly think that they should lean into that by actually putting a ticker on there. Like, you know how we all, like, FOMO? Like, okay, you've only got three weeks to watch the original snow white. And then there's going to be behind that all of the other snow whites, right? The, you know, real action snow whites, the ones with, you know, Shirley's Theron and all the, you know, all that stuff behind that. But like the OG, you know, animated snow white is only going to be available for this amount.

And honestly, those are the kinds of things that my daughters love to watch. But I do think that like for me, when I'm looking at paying more on any subscription, whether it's Disney Plus or whether it's Netflix or whoever it might be, ESPN Plus, I need to understand what the value is that I'm getting for that. So if with ESPN Plus I'm getting access to more games or international games or things like that that I wouldn't be able to get just on my cable, then that's, yeah, maybe I'm willing to pay the extra $699 that it's going to cost, right? But again, it's connecting those dots that make it an important perspective as well as continuing to grow that trust and that value add proposition. So I do think that like it's not necessarily that people don't want to pay more, but they want to see what they're getting. And if they're going to, you know, if you're saying if you want things like the Mandalorian, right, a Disney original, then you're going to have to pay for it. I also think, like, I would, you know, I think this is also when we talk about price hikes or, you know, rate increases, look, the customer, while the customer may not like it, we expect it, right? Again, we understand the brands, companies are in business to make money and that, you know, there are going to be times where they're going to need to raise prices.

But I think this is an opportunity for brands, whether it's Disney Plus or other streaming services or other businesses, you know, that may have a similar type of, you know, of purpose. or format to show that they pay attention to what's going on with their stakeholders and what's going on around them in the rest of the world, right? I mean, again, this was an opportunity to look and say, hmm, folks are struggling. The economy is shaky right now. You know, look at the unemployment rate. Look at the fact that folks are, you know, cutting things out of their budget. Is this the best time to do the rate height?

I mean, I mean, you know, Melissa made a really good point at the top like, hello, little tone deaf. did you already have this, you know, in motion and you just hit play and, you know, you kind of went with it. And so something as simple as just timing around a rate increase in addition to all the other things that Melissa has said, I think would have gone a long way. I mean, imagine if they maybe had held out until after the holidays, right, to give folks a little bit less of a strain. So again, people expect it. We all expect it. We know that the rate increases are going to happen. But I think, again, it's a moment to kind of show, hey, we're, we're,

paying attention to you. This is going to happen, but it's, it's the how. It's the how when we're going to approach making this happen. I love that, Kedera. I'd like to ask Michael about, like, and I don't know if you know about this from a pricing perspective, but is there a value, I mean, is there a feeling like a price lock is a worthy way to go from a marketing perspective to to lock in a price for customers, like, say, for a longer subscription versus, you know, kind of this drip and die kind of like upping it every six months? Like, is a company not willing to do that to lock in, like, and say, hey, if you sign up for two years, you're going to get it for $100 a year or something like that? Yeah. I haven't looked lately at all of the skews,

but when we launched, we launched an annual plan that was lower. And there was even a, I think a three-year, a tri-annual plan that we launched at the beginning. And we made it available to like big fans first. Like it was one of those special things. How about that? Like the power of that, right? To like, you know what? Get it for three years.

You know what I mean? It's going to be the lowest price. But we've got you retained for that. Right. And you have anything for three years. You're not getting rid of it probably. You know what I mean? But also, I remember the debate internally being like,

like those are people are going to buy anyway. So we're leaving money out of the table. So hence you have these monthly things that keep in play. The one thing to know about the Disney viewership, Disney Plus viewership is the rewatch propensity is very, very high. People watch that stuff over and over and over again, right? And so I don't know if they ever did it, but I remember in my product roadmap when I was there. There's this thing in the business they call cancel saves, like cancel save tax. So this is like basically when you're trying to cancel your subscription, when they try and do things to save you along the way.

But what he? Yeah, exactly. I was trying to build a personalized. I used to have a cancel save team. Yeah, I used to have a cancel save team. That was their name. That was her name. Cancel save.

Yeah. So one part of my plan was to personalize the cancel save journey. So if you were that Lizzie McGuire fan that rewatched that. for many, many episodes. I would want to show you that on the way out the door. Like, are you sure you want to leave this behind? You watched it like a thousand times. It's a part of your life.

You really want to leave it behind. Are you really done? Are you that over it? Right? And I don't think they ever went to that extent. But that's where I was headed for the reason of that high rewatch propensity, right? That's just a huge opportunity for a catalog like that. And I think, by the way, most streamers, they like to throw their catalog at their audience.

And I think maybe one way either retain people or reacquire subscribers probably is to sort of campaign on what is uniquely true in Disney. In other words, don't try and make things up. You can only take the bundling thing so far. Right. What about coming back to the very top, to the head, which is like, these are the best stories ever told? Because if we agree with that, we want that as a part of our lives. You know what I mean? Like, that's powerful.

So that's how I think they should fix it, Aaron. Okay. Well, we'll hold on to that one. And I understand the price, you know, the price increases is going to be part of a streamer's strategy. It's going to happen on a table, timetable, or it's going to happen in competitiveness with other streamers because you don't want to be underpriced for the market and what the consumer will bear. Is it fair? We saw recently there were 1.7 million consumers that said, now, for the moment, we don't agree with what's happening. We want out.

And then when they tried to come back, the understanding is they said, oh, yeah, welcome back. Here's your new price. Is it fair to, you know, to do that as a strategy, as a tactic, as something representational of the pulse of the customer and what the brand stands for, stand by your brand. Is that a fair? Or is that a little bit of, you know, I don't know what the right word is, but abuse of power? I don't know. What do you think? Shenanigans.

It's shenanigans. Yeah. Okay. Keep in mind, any price change? was already on the boat two months ago. Right. You know what I mean? Yeah.

I think that that's one of the things that, you know, Kadira, you know, I brought up at the beginning was like it felt very tone deaf that they launched it the week that they lost millions of subscribers. Right. And so what in the heck was going on there? And so I do feel like we as, you know, consumers do have a voice. voice, but like this is a, I mean, Disney, huge, huge, huge company. So there's a lot to be gleaned from this that it's, you know, they're not just listening to you. They're trying to run

this as best they can. But I do feel like, you know, maybe Michael you could talk a little too about like loyalty programs and things like that because I think what you brought up was really great about like the cancel save. I love that idea, like showing them that. like, oh my gosh, you've been streaming Lizzie McGuire for the last, or, you know, or, you know, as a parent, like, you've watched Frozen four times a day. Yeah, like, are your kids now in the, you know, are they Moana stage? Like, are you sure you want to give up this, you know, the Disney babysitter that you've had? You know, like, all those kinds of things. But I wonder if, like, you know, I've seen a few complaints about, like, some of the perks from, like, the loyalty programs. And I, I wonder if, like, I feel like rewards and perks are kind of like a generic thing that people try to do. But how can you incorporate it so that it holds the customer there, retains the customer? Because like, I don't know, is DoorDash $10 off?

Is that really a perk? Like, I guess it could be for, you know, streaming services. You're sitting at home. Yeah, but how about upping the ante and making a special park day for passover? Right. That's what I was saying. Yeah, yeah. Creating that magical experience, right?

Like, or you get one of those free fast passes, you know? It's got some value to it. I love the idea of incorporating other parts of the Disney ecosystem into the streaming world. I mean, I was, I remember before we knew we were going to get to $100 million in record time for lots of different reasons. I remember worrying that we were going to stall out at like $20 million or something like that, you know. So I was always thinking about like, what can you? we do while people are waiting in line on those parks, you know, for whatever ride, you know, they're standing in line for like an hour or two hours sometimes.

What could we do there to capture people? One of the things that we started while I was there was unifying identity of a subscriber as a park person that would go to Disneyland that would log on to the Disney website, that would go to Disney shop, right? All of those things. I think they called it one ID. And the idea there, was to start to unify that such that you could.

So the, Melissa, we know you from the park. And we know you over here as a streamer, too. As opposed to just knowing those things in isolation, now we know them together. That was the effort. And I think the opportunity. But you're right. I don't think the DoorDash thing is like a big deal.

You know what was a big deal was, I remember this, this another thing that came in hot around the launch, which was like, if you're a Verizon subscriber on their mobile service to the highest tier that they have, we're going to give you six months free of Disney Plus. There's a lot of value in that. Those kinds of things actually move the needle. Now, the problem is you have big churn events the minute those things turn over,

so you have to be prepped for those two, right? And not every streamer has the power to do those things well and to survive them. So sometimes the most recent streamer that I launched was a Spanish language streamer called VIX for Univision. And we tried that with T-Mobile, launching a, you know, the six. month thing and it didn't work at all. Nobody cared. There wasn't enough people to, but also very different catalog, right? It's not the Disney catalog. It does different IP. So not all IP is created equal, I think, too. Got it. Well, and I think it's important to like your, to your point

is like looking at the customer persona because, for example, college students, so I have a college student, right? And it's amazing like how certain brands have like, all, all in for the college students. And like Disney's a perfect example because that's like they just left home. They need those comfort shows. They, you know, like my daughter watched hidden figures for every day for like months. You know, they need whatever shows they, you know, and what a great opportunity to kind of build a new layer of customer loyalty and retention from this group.

And like, I know like, for example, if your student, use your. student ID to sign on, Spotify gives you a much discounted event so that you can have your own Spotify account. You don't have to be on your parents' Spotify account anymore, right? That kind of thing. And I feel like Disney has that opportunity too. And I love, you know, again, Michael, some of the examples that you've been sharing because I do feel like there's a chance to like really curate these experiences for people, like who have, you've just watched a ton of Mandalorian show, you know, all the shows. And it's obviously on your favorites, you gave it, you know, a high rating, all those things. And then to be able to go to the park and be like,

hey, because you are a loyal Mandalorian, we have a little special badge for you or a little sticker for your passport or you get a chance for a meet and greet with the Mandalorian at lunch, you know, that kind of thing. I think could go really far too. especially with bigger, you know, with families that do go through, because people are super loyal to like Disney cruises, Disney, Disney resorts, all of those things. And I think there's an ability to build upon that to kind of just enhance that brand loyalty there. I love what you're saying, Melissa. I think you're taking us into our fix it mode. So let's do that.

So let's, no, we've got to. We have to fix retention and acquisition. So if I'm pulling it together, reward your customers, especially your power or your most loyal customers with. And I like this idea of the rewards program to actually where, you know, maybe it's not a one size fits all reward. Maybe you figure out I'm a park frequenter. So I want my rewards to be at the park. Or I want to be part of the entire ecosystem of channels. So make that carry over to another, you know, to Aulu or.

enhance my subscription with bonus content or things like that. If it's redeemable on the customer level and helps impact their experience positively, wherever they want it, that can be achieved at scale. That would be a good way to go. We are talking about more event-driven programming. So, you know, I don't know if we can start taking away programming, saying now that it's on there, we've been trained for that always-on buffet type of thing. So I like the scarcity tactic, but if your price goes up and we start taking content away

at the same time. There might be a pushback there. But I like the idea of this event-driven programming where you've got a sing-along little mermaid, and it's always on there. But why don't we have an event? Why don't we all sing along to the Little Mermaid at 6 p.m. on a weekday?

And put your user-generated content up. Put your family singing along to the Little Mermaid, and let's make that an event. Or we're going to pick someone at random. We're going to pick them up at work and put them into Mandalorian Training Camp or, you know what I mean? Create these experiences.

where if you're part of the experience, it's gold value for you. If you're everyone else watching it, you have to be there for it, right? These are time-driven, specific events. I think that could add subscription value to it. And then follow, you know, as a company doing that mandated launch. You know, we've got to do this bundle. We'll figure it out later. If it has to happen, follow your instincts on it.

You can clean up the mess afterward, but people recovered from that and kept with their subscription and kept it growing and kept telling others about it. did very well. So I'd say if it sounds like it's, you know, if it's going to put someone like your customers through a hardship for a short period of time and everyone's going to benefit off the back end, just do it, right? We can get over it as consumers. So if we put those ingredients together plus anything else you might want to throw in there, we'll go. I'll throw it back to you, Melissa. Do we fix the churn and acquisition strategies? I think we have to, yes, do all of those things above. I also think the communication, I know Kadira is going to talk about this probably,

but the communication has to be very transparent and feel like you're listening to your customers. I do think there's an opportunity to create more of a habit-forming content engine. And so like HBO Max, who drops things on Sundays, I think Disney and ESPN Plus and Hulu, it's just a huge bundle right there. If they could, you know, get a more guaranteed, teed episode drop from their franchises on a certain time frame so there's no more dry spells because sometimes there's like a long period of time where there's nothing so that people get in the motion of like I remember when Walt Disney used to have the Disney shows on Sunday evening I'm very old I don't know if you knew that on regular network TV but like having something

like that so that families and subscribers can get together and have make it an event. Again, I think the, you know, having kind of this frictionous family bundle and making, you know, long-term subscriptions, I know that you're thinking, Michael, they're going to pay anyway, which is probably true. But I do think having that price lock and having their transparency and the value out there is something very important. And I love the idea of an experience that is all-encompassing entertainment experience. And it doesn't have to just be Disney.

It could be like, hey, we're going to have a bear experience in Chicago, come to a pop-up event. You get to see behind the scenes. And because you streamed the bear the most, you know, you're in a raffle to win a weekend in, you know, Chicago, something like that. So I think there are a lot of opportunities

for them to gain those users back. And, you know, and then just be completely honest. Like the timing of this price hike was already in motion and we're sorry and we hear you and we hear that people were upset about that. But we're trying to, we want you to know why we're making this price hike and what you're going to get out of it. Fantastic. I love it.

Kadeera, subscription and retention. Did we fix? I think we've got a good start. I think we have some solid ingredients. to use your word. I, Melissa, yes, I'll build on, you know, what you said about communication. Because I do think, you know, there was definitely likely some inconsistencies around external messaging, internal actions, what employees understood, especially as they were further down the chain

that was happening, all the things. So the communication piece for sure. The other thing that I would throw in is just around people and culture, right? because if your culture is suffering, you can build loyalty programs, you know, through up to the sky. And that's, you know, you're still going to have a problem. And so I would even go so far to say, like, you know, maybe thinking about how they link the employee experience, product, engineering, sales, you know, the creative team, whoever that might be, link that employee experience to the user experience. I also think that might be a really good ingredient from a fixed standpoint. Fantastic.

I love that. Like employee testimonials on why you should be excited for what's coming up, right? Yep. Yeah. Yeah. Now like the old video store model where you see who's recommending it. Right. Yeah.

Who within the team? I love that. I forgot a couple things. Also unlocking the content between the siloed channels. So am I a Hulu? I'm a Disney Plus. I'm in ESPN. Who cares? Like, here's programming for you, and it's across our entire system.

And I think maybe there's a rumor that it's all going to follow under the banner of Disney Plus eventually. So that might help to pull things together from a user standpoint and clarify the situation. But I forgot to throw that in there. And Michael, I forgot that I love your idea of that curated retention strategy where it's a way, I thought you loved Star Wars. Are you not a Star Wars fan anymore? and kind of guilt subscribers back into staying in the fold or Lizzie McGuire is going to miss you. You know, so I hope they put that into effect too. So throw those on top of the pile. But did we fix the retention, churn, and acquisition strategies?

So look, everything that's been said around this end, I think has been great tactics. Yes, to all of it. I think when I think about what needs to be fixed, I think there's a strategic aspect that needs to be contemplated. which is, let's face it, we're in a world now. We're at an inflection point with technology, right? We're at the very beginning of this next wave, this AI wave, that is probably going to change the world more than any technology has changed the world in our lifetimes. What does that mean for a streamer?

What does that mean for a streamer with deep IP, right? I think there's an opportunity to reshuffle the content, if you will. I've been thinking about this for like several months now in terms of like, Okay, I've seen all the Star Wars. I love them. And I've seen them multiple times. But what I haven't seen, what haven't I seen? The version of Star Wars that is like the Rise of the Jedi Stitch, the Stitch that is agnostic of each movie individually, but takes me and shows me a piece of content that pulls from every one of them.

So I might start with Luke in the first, like, lightsaber training with Obi-Wan, right? And then I might cut to Yoda where Luke's training in that swamp, if you remember that one, and the Empire Stripes strikes back. And then you flash forward to, like, Ray learning from Leah and Luke. See what I mean? Like, that's a different take on the IP. And it's something exciting again. And so I think using IP and using metadata and using personalized aspects, like what things pull me in from a content perspective?

It's got to be mood. It's got to be experiential. So I guess the shift from being catalog specific to me specific is what I think the biggest sweeping move could be. There's a lot of devil in details, but. I love it. I like that. Yeah. So release the lightsaber cut.

Yes. Nice. Okay. And with AI, how long before we're starring in our own Disney movies? Well, this is where it's also going, right? This is the other thing where you could see yourself, Aaron, in that last scene. You know, you could be one of the stormtroopers whose helmet just fell off. It's your face, right?

That's not hard to do. You know what I mean? That's another angle as to where this all could go. This evolved story. We all know the idea of alternate endings because maybe we've seen them before when people try. Some movies show you alternate endings. But what if your ending Aaron was different than Melissa's? because we know you differently.

That's bitching. And now you could talk about, now the water cooler conversation is about what was your ending. Right. Right. That's great. I love that.

All right. You called it here first. We're going to be seeing that. I know we will. I want to save the force. Or save the galaxy with the force. Michael Serra, thank you so much for joining us

and sharing your perspectives. Before we sign off, can you please tell our listeners a bit about your book called Build Something and where they can get it for themselves. Yeah, yeah. Thank you so much. And it's great to meet all of you. And I had so much fun talking about this stuff today.

Um, yes, build something I published it. I self-publish it back in February of this year. And it's a book. There's an entire chapter on the topic of Disney Plus and the launching of it and what happened. And what were the behind the scenes aspects of it, you know, launching paid titles in, in the service itself, Premiere access, like selling theatrical releases in them, like how that all came together is in there. But there's like 20 other stories,

the major stories about different things being built that I was a part of. So when I say build something, it's like, part of the idea is like we don't know the half of it about ourselves until and unless we embark building something. And the kind of lead that's buried is that it's all about the people involved in these things that make them happen. It's about culture. It's a culture book.

It's a product, culture book with a bunch of fun stories. You know, it talks about, I mentioned Disney. It also talks about like building out news and faith, putting news in the news feed in Facebook. That's a big part of the story. And, you know, the fact that that didn't end so well, maybe, right? And there's draft on impact and there's tradeoffs to these. How do these decisions even get made, right? There's a bunch of stories like that.

There's stories about MySpace. It goes on and on. But it's a, I think, a fun book. It's an easy read. You can get it. You know, you can get the basic copy at Amazon. But the souped up copy, with the color pictures and the cool cover and all that stuff,

that's on sites like Barnes & Noble and places like that. Okay, fantastic. And once again, it's called Build Something. Yes. Very good. Thank you again, Michael. Really great having you here. And Kadira, thank you for helping us navigate this Disney Plus situation in a unique way.

We took a different spin on it. Kadira and Melissa, thank you both for your brilliant takes as always. And to our listeners, if you are already a subscriber, of our show, don't cancel. There's more great stuff to come. If you're not yet a subscriber, you know what to do. We've been in the top 10 in our category lately, and we need your help to keep there. So if you like this episode, don't forget to like it, share it, and leave us a review. Catch up on back episodes at we fixeditpod.com. Tell your friends, colleagues, and loved ones, give us a shout on social, and we will see you next time. We hope you enjoyed this episode of

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