Disney’s New Streaming Service Could Steamroll the Market
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Disney’s Blockbuster Streaming Service Deal
You’d have heard of Disney+, the upcoming video streaming service of Disney ($DIS). It’s got tongues wagging and analysts buzzing, and for good reason. The service will be offered at $7 per month which will further reduce when you factor in the annual subscription that only comes to $70! Disney also offers a bundle package that combines Disney+ with its other streaming services ESPN+and Hulu for just $13 per month!
And at that competitive price point, Disney has a chunk of content. There is a range of original content from Disney in store. Moreover, subscribers will enjoy content in 4K Ultra HD resolution and unlimited downloads on 10 mobile devices. They will also be able to simultaneously stream on four devices. Dolby Atmos and Dolby Vision are also supported by Disney+. These features come at no further cost.
Undercutting Netflix by Half
If you were to find comparable features with a Netflix ($NFLX) package, you’ll have to look at its Premium plan which costs double that of the Disney+ plan - $16 per month! Netflix does have cheaper plans, but even they are costlier than this plan and have significantly lesser features.
According to recent eMarketer estimates, Netflix is already facing trouble in the US, with its market share going through a modest slip. This is largely due to significant competition in the OTT (over-the-top) streaming market. What Disney+ offers can be a direct blow to Netflix.
Potential Customer Exodus on the Horizon for Competitors
This could be a recipe for many Netflix subscribers gravitating to Disney. According to the investment bank Needham, American consumers don’t wish to keep piling on video services and expanding their monthly budgets. A Morgan Stanley analyst believes that Disney will boast more than 130 million subscribers totally through its OTT services in just five years, from the 30 million subscribers it currently has, spread over Hulu and ESPN+.
The trend has already started with Dawn Chmielewsky pointing out on Twitter that Disney set up Disney+ subscription kiosks at the D23 Expo and people were lining to sign up.
Signs of Popularity Already Evident
As things stand, Disney looks like a great stock now. With its competitively priced but fully loaded packages, Disney could well dominate the video streaming market with not just Disney+ but also ESPN+ and Hulu that are also offered as part of the aforementioned bundled package. Based on this, it seems Netflix could particularly be hit really hard along with other competitors out there as well.
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