Disney+ had its big reveal on Thursday as Bob Iger and friends laid out a bunch of major details about the Mouse House’s entrance into the streaming wars. The highlights were new MCU shows (including one starring Anthony Mackie and Sebastian Stan as the Falcon and the Snowman Winter Soldier), new Star Wars shows (Sunday’s Star Wars Celebration presentation of Jon Favreau’s The Mandalorian was apparently quite impressive), promised Disney original movies like Anna Kendrick’s Noelle and original shows like High School Musical and Diary of a Female President. Oh, and there is tons of National Geographic and behind-the-scenes documentary content too.
But the biggest reveal on Thursday was not necessarily its content, but rather the price. For those wishing to subscribe to Disney+ (and only Disney+, as Hulu and ESPN will be separate, with a presumed option for bundling two of the three at a discount), it’ll cost just $6.99 per month. If you sign up for the whole year, it’s $70 (or $5.83 per month).
You pay $5.99 for CBS All Access with the commercials (commercial-free is $9.99 per month). Disney is underbidding Netflix ($8.99 for the cheapest plan and $10.99 for HD), Amazon Prime (which cost $119 per year and comes with free two-day shipping for items purchased off Amazon.com) and (for now) Hulu ($7.99 with limited commercials and $11.99 with no ads). Yes, the plan may go up over the next few years as Disney gets more content (and arguably more subscribers), but for now, the service is essentially too cheap to fail.
Unless you hate Star Wars and Marvel and don’t have kids, Disney+ is positioning itself as a dirt-cheap item in your streaming library. Disney may take a short term loss in order to entice those who are wary of adding another streaming service to a deluge of options that now resembles the same “bundling” that caused folks to cancel their cable subscriptions. They are absolutely sacrificing the easy money that came with Netflix licensing deals so that Disney, Marvel and Lucasfilm content becomes Disney+ exclusive.
At that price, for what they are offering, once you hook most consumers then you’ve got them for the long haul. That’s especially true if the price doesn’t go that much higher over the next several years. When your kids are zoning out to the live-action Lady and the Tramp or the animated episodic Monsters At Work, it’ll be all too easy to just find another way to save $7 in any given month.
It’s not so much that Disney will topple Netflix and reign supreme in the streaming wars, but rather that they are positioned to be among the essential streaming platforms. Disney wants to be among the top companies for theatrical AND for streaming.
The global box office will be, at least for the immediate future, a three-way battle between Walt Disney (which now includes 20th Century Fox), Universal/Comcast and Warner Bros. Paramount/Viacom, Sony and Lionsgate will still matter, but they will be competing on a relatively different playing field. Ditto the smaller distributors like STX and A24. And the streaming scenario may play out similarly.
Netflix will remain Netflix, especially if its original movies can get a lot better anytime soon. Amazon will remain among the top services not because it’s indispensable but because folks will want that two-day shipping anyway. If you only have three streaming services, that third one is probably going to be Disney+, because it’s Disney.
Comcast and Warner Media will exist and may do fine alongside the biggies, especially if Warner combines DC Universe and some variation of Film Struck or the Criterion Channel into an affordable bundle. However, consumers will only want so many streaming services. If they have only three, they are going to be Netflix, Disney+ and Amazon. That will, presumably, leave the rest of the channels/platforms fighting for the same piece of the “supplemental” pie.
Unless cable ceases to exist and consumers take that $50-$100 and drop it onto as many streaming services as they can afford, there are going to be casualties. That’s not even accounting for DC Universe, Facebook, YouTube, Crackle, HBO Go or Apple. Every stand-alone company wants its own piece of the streaming pie, which means that we’ll end up with the exact opposite of what we were promised.
Instead of cutting the cord for a one-stop-shopping service, every major company is going to expect consumers to shell out $7 to $15 per month for their specific content. Barring change, or a true-blue multi-company bundling (essentially cable, but on demand and without commercials), there will be blood on the floor. For the moment, Disney+, Amazon and Netflix have the advantage.
Most consumers who already have Netflix will probably stick with it (unless they lose so much acquired/licensed content that they live or die on the quality of their original films and TV shows), while Amazon Prime (which is positioning itself as essentially the modern arthouse theater) will always have the “it comes with free shipping” advantage. And if there are to be three winners (or at least three leaders), Disney+ has an advantage due to brand recognition, price point, family-friendly hooks and the promise of new stuff from the most popular current cinematic brands.
Disney doesn’t have to win the streaming war; it merely needs to be among the top services and prove itself to be an essential “if you only have one or two streaming subscriptions…” purchase. And for that matter, it doesn’t have to win the theatrical marketplace war, and it may not after this year if it is in second or third place.
Netflix and Amazon will never be the top theatrical contender and Universal and Warner Media will likely never be among the top streaming services. And by pricing its streaming service at under than the price of a first-run movie ticket, Disney has an advantage of placing high in both the theatrical marketplace and the streaming marketplace.
