What’s Happening:
Historic Disney has become a content powerhouse, dominating the family entertainment genre. The company unveiled specifics about its forthcoming streaming service, Disney+, the most anticipated offering from the veteran conglomerate due to launch in November 2019.
Why it Matters:
The first news about Disney’s launch of streaming entertainment was first announced in April. Consumer marketing will begin in August, with Disney’s D23 fan club being given the first opportunity to subscribe. CEO Robert Iger said that Disney+ streaming would be the most important product launched during his tenure in upper management at the company.
Digging Deeper:
The Disney+ streaming service will cost $6.99 per month. A bundled package will also be available for $12.99 per month, and includes the core Disney platform, as well as ESPN+ sports streaming and the ad-supported version of Hulu.
The company is also planning to expand to international markets very quickly, some at the same time as the U.S. launch. Hulu, however, is currently only available in the U.S., so some questions remain on how this will be integrated for worldwide offerings.
With all the excitement around the launch of Disney+, the company’s current quarter earnings paint a complex picture of a firm in flux as it prepares for the future. Although the company already has huge amounts of content with which to populate the platform, it is spending large amounts on new programming for the launch.
Investors saw a hit to profits in the hope of future growth in the streaming space. Profit decline also resulted from Disney’s recent acquisition of 21st Century Fox, which it bought for $71 billion in March and is still working to integrate. The company announced that its direct-to-consumer division was likely to lose around $900 million in the fourth quarter of this year.
The Bottom Line:
The launch of streaming entertainment puts Disney squarely on the playing field with services such as Netflix. With more than 60% of U.S. homes and nearly 50% of U.K. homes currently subscribing to at least one streaming service, the market is ripe.
“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,” Iger said.
