Disney just showed everyone how it plans to beat Netflix: Create an exclusive home for some of the world’s most popular movies, shows and characters, and charge a shockingly low price for it.
“I’m sure this was a signal to Netflix and everybody else out there that’s charging $4, $5, $6 more than this,” said Trip Miller, a Disney shareholder and managing partner at Gullane Capital Partners. “They’re here to take market share and eyeballs away from the competition.”
Pricing for a ‘fire sale’
At the company’s investor day in Los Angeles, Disney(DIS) said it expects the new service to have 60 to 90 million global subscribers by 2025. By that year, the company plans to be investing more than $2 billion in cash on original programming.
Those subscriber targets explain why Disney is offering its service at what one expert called a “fire sale” price.
“This is a big meteor dropping into the middle of [the media industry], and it’s going to have ripple effects,” said Larry Downes, project director at Georgetown’s Center for Business and Public Policy. He studies telecommunications and streaming services.
The competition won’t have much time to adjust. Disney+ will be available in the United States on November 12, and it will roll out worldwide over the next few years.
It’s unclear how long Disney will be able to hold to its $6.99 price point. Other streaming competitors, including Netflix, continue to raise prices. But right now, Disney is mostly concerned with gaining customers in a crowded field, so it set its price to accomplish that.
“What they really want to do is buy subscribers and get them hooked on the service,” Downes said.
A library of exclusives
Other than the price, Disney has another killer feature: its content.
Disney executives wasted no time explaining how much content is going to be exclusive to the service. There’s the company’s extensive back catalog of animated Disney movies, including “Bambi,” “The Jungle Book” and “Aladdin.” The service will also have Pixar, Marvel and “Star Wars” films — including the original “Star Wars” trilogy, which suggests the company bought back the rights to those films from CNN’s parent, WarnerMedia.
Disney flaunted a few movies and TV series it picked up when it acquired most of 21st Century Fox, too, including “The Simpsons.” All 30 seasons of the beloved animated comedy will be available on Disney+ from day one.
Disney plans to have more than two dozen original series and several original movies during the platform’s first year of release.
