Walt Disney has presented its new streaming service, Disney+. With an annual subscription, the service costs USD 5.83 per month. The service is expected to have a much faster take-up than Netflix, offering significant opportunities for Disney+. Other players preparing their own streaming services, as well as linear TV, will feel the competition.
Disney+ will start on 12 November in the US and is expected to reach western Europe in Q1 2020 and the rest of the world within two years. The company targets 60-90 million subscribers within five years. Breakeven is expected by its fiscal year to October 2024, when the company as a whole should show an operating profit. At Disney's recent investor day, it also gave updates om three other standalone streaming services: ESPN+, Hulu and Hotstar. The former two are also expected to expand beyond the US, and the company is thinking about eventually offering a bundle of the services with a discount.
Good specs
The 'specs' of Disney+ look very promising. A low price, a wide range of original content, apps for many different devices, and high quality (4K and HDR).
The comparison with Netflix is inevitable. Netflix started in 2007 offering steaming and grew to 60 million customers in early 2015 and 90 million by the end of 2016. Disney expects a much faster uptake. This is not so unusual, as Netflix has already opened up the market, broadband networks are much more advanced and there are many more supporting devices and screens.
With Disney removing its content from Netflix, the two will actually complement each other, rather than overlapping and leading to the feeling among consumers that they're paying twice. While the outcome is difficult to predict, both Netflix and Disney+ remain very attractive services. From a financial perspective, Disney is much stronger, as Netflix is still not self-financing and likely will not be anytime soon. Disney can absorb the start-up losses and expects to break even within five years for all its streaming services.
More competition
For other services, such as the recently announced products from WarnerMedia (AT&T), NBCUniversal (Comcast) and Discovery, Disney's new service comes as a bit of a 'knock-out bid'. The price, extensive content catalogue and financial strength of Disney means Disney's service cannot and may not fail. Apple and Amazon are taking a more distant position, by focusing more on up-selling to the existing installed base.
Nevertheless, smaller providers will see new opportunities. They offer unique content and there are more and more distribution partners, such as Amazon Channels and Apple TV Channels. They can also look for cooperations to bundle their forces, such as Hulu (US), Britbox (UK), NLziet (Netherlands), LOVEStv (Spain) and the upcoming Salto (France) and renewed 7TV (Germany).
For linear TV, the growing range of OTT services will of course mean more competition and further incentives for cord cutting.
