Disney’s aggressive streaming package

As reported in WARC, the historic company and now content powerhouse, Disney, unveiled further details around its forthcoming streaming service Disney+ and what it all means.

Speaking on an earnings call this week, Disney’s CEO Robert Iger said the new service would be the most important product launched during his tenure at the top of the company.

Though Disney+ is the most anticipated offering from the veteran company, this quarter’s results paint a complex picture of a firm in flux as it prepares for the future.

Of course, none of this has come cheap, and investors had to stomach a hit to profits in the hope of future growth in the streaming space.

In addition, profit decline also had a lot to do with the ongoing efforts to “effectively integrate” its March acquisition of 21^st Century Fox, which it bought for $71bn.

News of the new service was first revealed in April, with a launch date slated for November this year.  

Following this week’s results, that date is still in place, with Iger adding that marketing activity around the service will begin later this August, and will allow members of Disney’s D23 fan club to be the first to subscribe.

As for the subject of that marketing effort, the full Disney+ bundle will cost $12.99 a month and will include the core platform, as well as sports streaming service ESPN+, and the ad-supported version of Hulu – the same price as Netflix’s most popular subscription package. Disney+ alone will cost $6.99.

Though the company already has huge amounts of content to populate the platform, it is spending dearly on new programming for launch.

CFO, Christine McCarthy told investors that the direct-to-consumer division was likely to lose around $900m in Q4.

However, that package is powerful. In Iger’s words: “Disney+ will ultimately become the exclusive streaming service for our vast library of movies and series, National Geographic content, all upcoming Disney, Pixar, Marvel and Star Wars movies and a robust slate of high-quality original programming from the creative engines that drive our entire company.”

Disney+ will also go to international markets “very quickly”, Iger said. “I think two actually are going to launch when we launch Disney+ around the same time.

He declined to clarify which markets those would be, though all present their own challenges: local distribution and local content is a necessity. On the other hand, Hulu is only available in the US – a topic that Iger managed to evade.

Still, Disney is now squarely in the arena with streaming services like Netflix. It is a rich market in which to play. Data from the UK’s media regulator Ofcom shows that 47% of British homes now subscribe to at least one service.

Meanwhile, in the US, as many as 64% of Wi-Fi enabled households use an OTT service, according to WARC data, with around a fifth of those having ‘cut the cord’.

Sources: Disney (Via Seeking Alpha) and WARC