Disney+ Finds Leverage In Price, Exclusivity
After months of speculation, The Walt Disney Company revealed details of its SVOD service to investors on Thursday. Completely ad-free, Disney+ will focus on low subscription fees, bundles and exclusive content.
Disney’s new SVOD platform will launch on November 12, the media giant revealed, with a price point of $6.99 per month. Unlike Hulu, 60 percent which Disney acquired along with 21st Century Fox, Disney+ will be ad-free and obtain all revenue from subscriptions. The service will be available exclusively in the US at launch, but Disney plans to roll out the new service globally over the next two years.
The service will be available on mobile and connected devices, with an “unprecedented amount” of content available to download for offline viewing. Disney+ will adjust the content’s resolution based on available bandwidth and support up to 4K HDR video playback.
When Kevin Mayer, Disney’s chairman of direct-to-consumer and international, announced the service’s price point, there were “gasps in the room,” according toVariety reporter Cynthia Littleton.
The low price point makes Disney+ less than half of the cost of a premium Netflix subscription, which was recently bumped to $16 per month.
Mayer told the audience that the company is “actively evaluating international rollout strategies” for Hulu, as well as bundling options with Disney+ and ESPN+.
The Mouse House isn’t known for its lack of ambition. Case in point, Disney told investors that it expects the service to grow to between 60 million and 90 million subscribers globally by fiscal 2024.
A working prototype of the service was shown with a similar layout to Netflix, displaying categories like “Recommended for You” and “Continue Watching.” Dedicated pages will be available for Disney, Pixar, Marvel, Star Wars and National Geographic. Subscribers will have the ability to create custom profiles linked to a recommendation engine.
“We’re extremely excited about our growing portfolio of direct-to-consumer offerings. As we demonstrated today, with Disney+ we will deliver extraordinary entertainment in innovative ways to audiences around the world,” said Mayer. “We’ll continue to enhance the user experience with a constant pipeline of high-quality programming, making the service even more appealing to consumers.”
In a 2017 study, Magid found that original content drove OTT subscription behavior in the US. In addition to its existing library of movies and shows, Disney+ will launch with 25 original series and 10 original films, documentaries and specials. Disney+ will also become the exclusive streaming home of The Simpsons.
“The price point [for Disney+] seems well-suited, realistic and appealing,” Debby Ruth, Magid’s vice president of global media and entertainment told AList following Disney’s announcement. “As technology evolves, the proliferation of SVOD services and any direct-to-consumer (DTC) offering is going to be essential for content providers.”
Disney shares jumped 11.5 percent on Friday following the announcement, while Netflix stock fell over three percent, MarketWatch reported.