Beauty and the Beast

Exclusive content is what Disney+ is all about

Last week, at its Investor Day in Burbank, California, Disney officially unwrapped its direct-to-consumer streaming service. Called Disney+, the service will launch in the US on 12 November 2019 at a price of $6.99 per month or $69.99 per year. Nearly a century’s worth of Disney content will be available on demand to subscribers, including the option to download content for offline viewing.

The announcement wasn’t a surprise. In 2017, as part of its growing strategy to target consumers directly, Disney announced that it would begin pulling its content from Netflix, allowing its contract with the popular streaming service to expire. That decision marked the beginning of the end of a partnership between the two companies and the start of what’s likely to become one of the most interesting competitive scuffles in the modern era of the entertainment industry.

The monthly pricing of Disney+ compares with Netflix’s $12.99. We observe that these services aren’t mutually exclusive, and we expect many households will subscribe to both. But people’s time and money are limited and it’s likely that Disney will begin luring customers from Netflix and other online content services. Nevertheless, this will take time. Disney’s punchy pricing reflects a land-grab strategy, as the Mouse House seeks to win share in an increasingly competitive market: it’s targeting between 60 million and 90 million subscribers by the end of 2024.

Disney’s announcement comes only weeks after Apple unveiled plans to enter the streaming video business with its own exclusive content (see Apple’s Ensemble Cast). But while Apple is putting several billions of dollars into creating unproven shows, albeit with some top industry talent, Disney has a vault filled with nearly a century’s worth of highly-regarded films and series.

Aside from the value of the Disney brand, the company is hitting the market with sub-brands that include Pixar, Marvel, Star Wars and National Geographic. Disney clearly isn’t holding back in its library of content for the streaming service, which will also include a long history of nearly all the company’s videos as well as recent releases.

Once Disney+ goes live in November 2019, it will feature movies like Captain Marvel, The Lion King, Toy Story 4, Aladdin, Avengers: Endgame and Star Wars: Episode IX. It will also show all episodes of popular TV series such as The Simpsons, Kim Possible, Ultimate Spider-Man and Wicked Tuna. It will lack Disney’s sports service ESPN+ and Hulu TV (Disney is a 60% owner of Hulu), although the company says it hopes to offer bundles. Disney also plans to follow the launch in the US with packages for other countries.

It’s not just other streaming services that will be affected by Disney+, but also traditional broadcasters, which have seen their subscribers slim down their video packages. Disney can combine its exclusive content with Hulu TV, including its ABC network shown together with ESPN, to create packages that could replace those of broadcasters. On the flip side, the move also serves to create an even more fragmented market for customers, as the services of Disney and Apple join those of Amazon and AT&T, which is expected to introduce a streaming platform later in 2019 (see US Carriers Take Different Paths in Pursuit of Content Opportunity).

Although content isn’t a commodity, and it’s not possible to directly compare titles, there’s no doubt that Disney+ is an attractive and very competitive service. Unlike many of its rivals in streaming, Disney isn’t starting from scratch and comes to market with a beast of a portfolio. The company is certain to emerge as one of the leading players to watch.