Last week, Disney introduced Disney+, its new streaming
service. The price is $6.99/month as a
standalone product or $12.99/month when bundled with Hulu and ESPN+. The bundle price is the same as what Netflix
charges for its most popular offering. Within
the first day, 10 million households had subscribed.
With full operational control of Hulu since the spring,
Disney also announced that effective December 18, the price of its Hulu+Live
service will go from $45/month to $55/month, a 22% increase. The price increase comes 6-months after a
12.5% increase in January (from $40 to $45).
If you had any doubt, the two announcements “define” what
market power looks like! While Netflix
had the first mover advantage and has grown to over 150 million global
subscribers in a dozen years of streaming , Disney’s huge brand identity and intellectual
property assets (which it no longer licenses to Netflix), makes its “late” entry
into the market a huge concern for Netflix.
For now, Disney can enjoy the fanfare and the excitement around the
launch. But, in 2020, the market is going
to get more crowded with other media giants (e.g. NBC Peacock and AT&T’s HBO
Max) entering with their own direct-to-consumer entertainment choices that will
be priced to attract and retain subscribers.
While it is not a zero-sum game or an "everyone will be a winner” situation,
expect that, when all is said and done, Disney will be one of the major players in this space.
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