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Disney+: a doozy

Abby Sullivan Nov 14 2019

On today’s episode, in honor of the Disney+ drop, we go streaming crazy—with live reactions, the hard facts, and a breakdown of the full streaming roster. What would it be like if you subscribed to them all?

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Disney+ vs. Netflix: what's the status here?

We start with the facts. 

Disney+ made its way into the world, and in time, we see Netflix could lose 25% of its subscriber base. 

We know Netflix and Disney as two entertainment titans with very different backgrounds. Netflix shot from obscurity to become a multibillion-dollar company in a span of 20 years and Disney is a household name that has kept innovating and up with the times over the last century.

But in the streaming world, the tables are turned. Netflix is the incumbent to Disney,  and until recently, had been playing catch up.

So what’s the reason behind the potential Netflix drop in subs?

There are a few reasons here. Three out of five top shows on Netflix are from separate broadcasters. That includes Friends and The Office, both of which are licensed content. Netflix paid $100 million to Warner Bros. to keep Friends for 2019, 3x more than last year. And last quarter, Netflix lost subscribers in the U.S.—its biggest and most lucrative market—for the first time ever.

In an attempt at remedying this, Netflix is producing its own movies and OG content with its $7 per month price tag. Last year it spent $12 billion on original content, and will reach $15 billion this year. 

Disney+, on the other hand, launched with all of its own content—and not only are they the owner of the classics, but also Marvel, Lucasfilm, National Geographic, ESPN Classic, 21st Century Fox, and Pixar. That is a lot of acquisitions. And now, those subsidiaries are available via streaming Disney+. That's 10x more content than Netflix has original shows. Disney has seen three-year growth of 4,283% with a 2018 revenue of $14.3 million—so we can only wonder what kind of MRR they’ll achieve with this new service.

It was only a matter of time before the big studios and broadcasters caught up with the likes of Netflix. Although they were making a boat load of cash from licensing their shows, Disney+, NBC, and fellow giants were well in the loop on where the market’s going, and they needed to have an answer. 

So what will happen to Netflix? I’m not entirely sure, but I know it will continue to pour money into its original content, and potentially even drop its price. The Netflix team is going to lose a handful of popular content and we know it won’t stop at Disney. 

With this Disney drop, we’re curious: Can they continue to be the industry leader amid a fellow titan in the scene?


A pricing strategist's POV

And now, we’re checking in to see what “the people” are saying. Pricing Strategist John Mangini is back in action with us.

"Going into it, we knew that they [Disney] could've charged at a higher price point, right? We saw the data. Families were willing to pay more for, not just Disney+, but for Netflix. But they do want to get that share of wallet that can get people to buy [both] Netflix and Disney+."

What will this mean for Netflix, though (if anything)?

"Netflix is now competing with Disney, and yes, they're a tech company, but they're looking much more like a studio, they're looking like a production studio company. So now they're competing with Disney for something that Disney is already phenomenal at—which is creating amazing content, getting user engagement."

What about the nostalgia factor here?

"I was only assuming the kids would want it. I wasn't thinking about someone in their late 20s/early 30s who doesn't have any kids, but actually with that nostalgia factor, you want to get Disney+, which is a market I didn't think they were going to tap into at all... But to think about something like Boy Meets World, I'd pay seven bucks a month to rewatch Topanga and Cory Matthews talk about their love life."


We subscribed to all the streaming services, so you don't have to

Our fellow content guru James Herrick put a little streaming experiment in place. And here's how it went down:

"That’s right. I subscribed to all the giants in streaming so you don’t have to (or you can, if that’s your thing). In a nutshell, here’s what I found:

With the launch of Disney+ and the continual launch of new streaming services, our team sat wondering what it would cost to subscribe to all the streaming services out there. But before we dove into the new way we binge our favorite tv shows, we needed to examine what it costs to watch TV in the traditional sense. 

I do still have a cable subscription through Comcast. The cost of 125+ channels and internet comes out to $59.99, amid other fees for broadcast, modem, cable box rental, and “other,” (they never clarify exactly what “other” constitutes) that come out to a total of about $99. 

We are already familiar with Netflix’s pricing, but for the purpose of this experiment, I used the basic streaming plan at $8.99 a month for access to all content, usage on one screen at a time, limited to standard definition resolution.

We’re up to $108.

Disney+ has an out of the box price of $6.99, but my plan was to subscribe to everything, so I opted for a bundled package of Disney+, Hulu, and ESPN+ for $12.99 a month—which brings us up to $120.98 monthly. 

And for that Emmy Award winning content brought to us by Bezos, the addition of Amazon Prime Video gets us to $129.97 each month.

As mentioned earlier, I am still using an old fashioned cable TV subscription, premium channels not included, so I do not have inherent access to HBO. I won’t drop a bunch of Game of Thrones spoilers in here (because I’ve been asked not to) but I will do the math. With HBO, we’re at $144.96.

Last but not least: Apple TV. In an attempt at not complicating things, we’re only considering Apple TV+, which can be accessed on any Apple device through a $4.99 monthly subscription. With Apple TV+ rounding out my subscription services, I am shelling out $149.95 a month, which means almost $2k per year for all my content needs.

But the question remains: Is it necessary to have all these subscription services? 

The answer: Probably not. And I don’t think many people will pay for all these services at once. What will most likely happen is that people will pick and choose what they want to watch, when they want to watch. Most of these services have created bingeable content that can be consumed in one or two sittings and once you’ve finished your favorite series, you can easily pull the plug on that particular one. The corporations probably won't budge on their pricing because for the most part, on their own, each service is incredibly affordable. But in the long run, they will need to figure out how to keep people subscribed and locked in. My guess is more original content and at a very steady pace."


Pricing Page Teardown: Disney+ vs. Netflix

Netflix and Disney are two entertainment titans with very different backgrounds. Netflix shot from obscurity to become a multibillion-dollar company in a span of 20 years. Disney is a household name that has kept on innovating and keeping up with the times over the last century.

But in the streaming world, the tables are turned. Netflix was the incumbent with Disney playing catch up. In this Pricing Page Teardown, Patrick and Peter look at what the data says about this rivalry. We've waxed lyrical about Netflix's pricing before, but can they continue to be the industry leader once a titan such as Disney is on the scene? Let's dive in and find out.

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By Abby Sullivan

Content Marketer

Subscription market insights you won't find anywhere else.