Disney (NYSE:DIS) knew that this might happen. Disney+ has been heavily hyped for months, and Disney wanted as many people to be subscribing and streaming as possible. But with great popularity comes the potential for high-profile disaster. When the service actually debuted at midnight EST on Nov. 12, plenty of those customers were wide awake and ready to stream -- and, in some cases, were unable to. Welcome to tech, Disney.
At first blush, the problems looked like ones we've seen before. AT&T's (NYSE: T) HBO, among others, has dealt with stumbles in the face of high traffic: At several points over the course of Game of Thrones' iconic run, streamers tuning in at the same time for big episodes crashed HBO's servers. Still, Disney would presumably have preferred a smoother launch for its would-be Netflix (NASDAQ: NFLX) killer. The company had plenty of time to prepare. What went wrong?
There's only so much you can do
Disney wasn't wasting time ahead of its launch. The company's brass was fully aware of the potential drawbacks of Disney's own massive fan base when it comes to streaming quality and crashes. Disney had some experience with streaming ahead of Disney+'s inception (it co-owned, and now controls, Hulu), but company leaders were wise enough to know how tough streaming can be at scale.
That's why Disney bought BAMTech, a streaming tech company that was spun off of MLB Advanced Media (Major League Baseball's MLB.TV streaming service was among the first live streaming services, and its MLB Advanced Media organization plays a huge role in the history of streaming services) and was at the controls during at least one of HBO's Game of Thrones-fueled crashes. Michael Paull, the former CEO of BAMTech and current president of Disney's streaming service, said his team was "thinking very much" about how to keep Disney+'s traffic rush from replicating the problems he saw at HBO.
Despite the preparation, launch day war marred by outages. But Disney says that server capacity wasn't the issue this time around; instead, it was "the way we architected the app," Disney exec Kevin Mayer told The Verge. Either way, though, it comes down to demand: Disney+, like outside analysts, was not prepared for the scale of its own success. It's also hard to say how bad Disney's outages were; the issue was widespread, but it certainly did not affect every streamer.
Disney+ already has more subscribers than Disney expected at this point. Disney's pre-sales and other promotions presumably helped take the temperature of the market, but there were also plenty of people who rushed to sign up at the last minute or even after the service's midnight launch. Wherever they came from, the extra customers were there, and it was that popularity that crashed the app.
It's also worth nothing that Disney's new streaming service was expected to lack an app for Amazon's Fire TV until less than a week before the big launch. Building the app wasn't an issue -- Disney presumably had one ready to go, anyway -- but a last-minute arrival on one of the most popular home streaming platforms could have had a big impact on Disney+ subscription sales.
The timing of Disney's launch made it prone to streaming failures, too. Disney+ launched at midnight Eastern on a Tuesday. That's pretty late to be staying up on a Monday night on the East Coast, but it's hardly prohibitive. For the rest of the continental U.S., of course, that works out to either 11 p.m. Monday, 10 p.m. Monday, or 9 p.m. Monday -- all pretty reasonable times to stream a show or a movie.
That's what Disney wanted, but it meant that a lot of new customers would be logging in all at once. It's hard to say whether the midnight crush was larger or smaller than the following evening's was (while users would presumably log on in a more staggered way, after-work and after-dinner streaming hours tend to be peak times for these sorts of services), but outages made it clear that midnight Tuesday was a rough time for Disney+.
And that could be trouble, because this isn't the last time that Disney+ will face a crush of user traffic. In addition to the always-busy evenings, Disney+ will create much-hyped moments with its weekly release schedule for original programming. The Mandalorian, which is already getting positive reviews and a lot of fan attention, will drop a new episode on Friday. That will almost certainly cause a lot of Star Wars fans to log on at once, which could cause a repeat of the launch-night incident.
Disney is also relying on third-party content delivery networks -- web servers that distribute streaming content to end users faster than would be possible if everything came straight from one place. By contrast, Netflix has invested in its own CDNs since 2012 and no longer needs the help of third parties.
Righting the ship
Disney+'s launch-day crashes aren't the end of the world, but further crashes would mar a launch window that is very important to the fledgling streaming service. All eyes on are Disney+ right now; that's a good thing for Disney, but it can become a bad one quickly if the service can't handle heavy traffic.