Streaming, Baby Yoda, and Healthcare

By KIM BELLARD

I’ve never seen The Mandalorian.  I don’t have Disney+.  But I know who Baby Yoda is, and I’m pretty sure Disney is counting on that.  Hollywood, in case you haven’t been paying attention, is going through some radical changes.  There may be some lessons for healthcare in them. 

2020 has been the year of streaming.  Moviegoing isn’t entirely dead in the pandemic, but it may be on life support, with major chains like Regal and AMC barely staying out of bankruptcy.  “Yes, there is pent-up demand to see movies in a theater,” Hollywood insider Peter Chernin told The New York Times.   “But people change their habits.”

Indeed, they do.  A new Press Ganey survey found that telemedicine visits shot to 37% of all visits in May, then settled down to around 15% – far above less than 1% pre-COVID-19.  Habits do, indeed, change, even in healthcare. 

Hollywood has made some startling announcements in the past few weeks that illustrate how swiftly changes are coming to the entertainment industry:

Disney: Disney expects to have 100 new titles – TV shows or movies – each year for the next few years.  Disney chairman Bob Iger noted modestly: “The pipeline of original content we’re making is much more robust than originally anticipated.”  Of particular note, though, CEO Bob Chapek said, “Of the 100 new titles announced today, 80 percent of them will go to Disney Plus.” 

NYT characterized the move as: “Here is a 97-year-old company making a jump to direct-to-consumer hyperspace.”  (If you don’t get the reference, you probably didn’t get the Baby Yoda one either). 

The strategy appears to be working.  Disney said that its year-old Disney+ streaming service already has 87 million subscribers; it had originally projected to reach this number by 2024.  Now it expects to reach 260m subscribers by 2024.  And those numbers do not include Disney services Hulu (39m) and ESPN+ (12m).  Collectively, Disney now expects up to 350m subscribers by 2024. 

Warner Bros: Although Disney expects some of its movies to still have theatrical runs prior to streaming, Warner Bros announced in early December that all of its 2021 releases will be available for streaming on its HBO Max service upon release, rather than after the “traditional” 90+ day wait (outside the U.S., where HBO Max is not yet available, the movies will still be in theaters first).  It had previously announced that its big 2020 release – Wonder Woman 1984 – would be released this way.  Shares of major theater chains dropped precipitously after the latest announcement.

“We see an opportunity to do something firmly focused on the fans, which is to provide choice,” WarnerMedia CEO Jason Kilar wrote.  That’s all well and good, but it’s worth noting that Warner Bros is owned by AT&T, and AT&T views this strategy as a way to instill more loyalty to its wireless services, even at the potential cost to theater revenues.

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If you’re worried about the original streaming service – Netflix – don’t be.  Although its growth has slowed, that’s partly because it already has close to 200m subscribers worldwide.  Its stock is up over 50% YTD, and even the announcements from Disney and Warner didn’t seem to shake that.  Similarly, Amazon Prime has over 150m video users, more than half of them in the U.S., and continues to invest heavily in new streaming content.

It’s a new world for Hollywood.  Brooks Barnes, NYT entertainment reporter, wrote: “one Warner Bros. executive told me that “the town” felt like a dismantled movie set: The gleaming false fronts had been hauled away to reveal mere mortals wandering around in a mess.”  Another Hollywood insider told him: “I see this as a time of opportunity.  Sometimes you have to take it down to the studs and build something new.”

Healthcare’s “false fronts” have been torn down too.  We’ve exposed our glaring lack of public health infrastructure, our inability to generate enough PPE, our testing has been abysmal, and now our hospitals, particularly our ICUs, are overflowing.  We’re used to handling expected elective surgeries and even “normal” emergencies, but were caught flat-footed by a pandemic. 

 If ever there was a time to take healthcare “down to the studs and build something new,” this is it. 

We brag about the increases in telemedicine, but we should note the CMS rules that have expanded its use are only temporary.  We haven’t addressed the inter-state licensing issues.  We’re not even doing telehealth visits all that well; the Press Ganey survey concluded: “The bad news is that patients clearly feel that the process of telemedicine (logistical things like ease of scheduling and making audio/video connections) falls short.” 

We’ve seen dramatic declines not just in office visits but also in use of preventive services and screenings, elective surgeries, emergency room visits, even heart attacks.  We just don’t know if these declines are good or bad.  Researchers Allison H. Stokes, PhD, and Jodi B. Segal, MD, suggest in Health Affairs: “We see a unique methodological opportunity to evaluate the harms of low-value care.”  Another researcher, Dr. H. Gilbert Welsh agrees, telling NYT: “We are in the midst of an unprecedented natural experiment that gives us an opportunity to determine the effect of a substantial decline in medical care utilization.” 

But will we take advantage of that opportunity, or will we just go back to our old ways once the vaccines work their magic? 

E.g., will healthcare just expect patients to go back to the theater?  Or will major healthcare companies bet big on the future: “streaming” (aka telehealth) as the main consumer point-of-contact, with patient convenience as a main driver?  Where digital is the norm? 

Disney’s physical locations – its theme parks – are hemorrhaging money, and Warner Bros has suffered dramatic declines from theater revenues, but both are betting big on their virtual strategies – and the markets are rewarding them.  Warner says its announcement is only a strategy for 2021, but, as NYT put it:

It will be almost impossible to go back, and it may force other studios to abandon the old model. Fans trained to expect immediate gratification will not be eager to return to the days of giving theaters an exclusive period to play movies.

We shouldn’t expect patients to go back to the “old” healthcare system either. 

I’m not expecting healthcare to have a Baby Yoda caliber idea, but it can certainly do better than its current Jar Jar Binks strategies.   

Kim is a former emarketing exec at a major Blues plan, editor of the late & lamented Tincture.io, and now regular THCB contributor.

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