Hurray for Hollywood? How Media Conglomerates’ New Partial Disintermediation Strategy Shapes Consumers’ Use of Streaming and Television

After facilitating the rise of streaming giants like Netflix and Amazon by licensing them high-quality content, America’s leading media conglomerates have radically changed course. They are increasingly implementing a new partial disintermediation strategy, which limits the licensing of content to linear TV broadcasters while serving streaming customers via their own direct-to-consumer offerings. Does this strategic shift facilitate the decline of linear television, as it increases the attractiveness of streaming? Or does the move threaten those who are currently dominating the streaming market? This study uses the launch of Disney+ to assess how Hollywood’s new offerings affect streaming and TV consumption. The authors use consumer panel data about their adoption and viewing times across several media formats before and after the launch of Disney+, and analyze changes in endogeneity-adjusted difference-in-differences models. Results show that right after its launch, the adoption of Disney+ increases consumers’ time spent with subscription streaming, at the expense of both free TV networks and streaming incumbents, although adopters maintain their existing subscriptions of Netflix and Amazon. In the longer run, adopters reallocate their viewing times mainly within subscription streaming, while other formats are less affected. Actionable implications for broadcasters and streamers are derived from the results