Disney Embraces Fan Content in Groundbreaking TikTok Deal

It’s a short-form video world after all.

In his first earnings report following a full quarter as CEO, Disney’s Josh D’Amaro got to claim some welcome wins for the House of Mouse: booming profits for its Experiences division, solid streaming growth and strong box office revenue, thanks to the blockbuster Toy Story 5. But that’s not to say that the Magic Kingdom is comfortable with the status quo. Separately, Disney announced a “first of its kind” content-sharing deal with TikTok, the company’s next move to find the cutting edge of culture after its ill-fated IP-licensing deal with OpenAI’s Sora video generator went kaput earlier this year.

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With subscriber growth topping out and churn on the rise, media giants are desperate to scale their advertising businesses (D’Amaro also hinted yesterday that Disney is building a Tubi and Roku Channel-esque FAST service). 

Ads need eyeballs, and eyeballs, as everyone knows, can’t be peeled away from short-form video. The TikTok deal is merely an evolution of how Disney and every media giant are learning to love the power of the vertical scroll:

• So far this year, Netflix, Peacock and HBO Max have all debuted vertical video features in their mobile apps; Disney+ actually launched its “Verts” vertical in March. The idea is that users will scroll through memorable scenes from favorite movies and TV shows, possibly spurring further engagement.
• Disney+ “Verts” have thus far been created by an in-house team. With its new partnership, TikTok creators will now have legal access to Disney assets such as characters or movie scenes, and Disney will showcase “thoughtfully curated” TikTok content on Disney+ Verts if creators opt in to the feature.

Editor’s Note: Wall Street showed some love, with Disney shares jumping 3.6% on Wednesday. For Gen Zers, the partnership couldn’t have been more obvious. Hollywood’s biggest fans have also become its best advertisers, and studios are increasingly embracing so-called “fan edits,” or user-generated hyper-stylized short-form social media videos hyping up shows and movies. In the TikTok age, a viral montage of Ross and Rachel scenes set to a modern radio hit, for example, can rocket Friends back toward the top of streaming charts. Yesterday’s copyright violations are today’s copywriting masterpieces, and the famously litigious Disney just made it official.