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Financial News

Apr 17, 2019

The House of Mouse vs. Netflix

By Team Stash

Disney’s new streaming service enters a crowded field.

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The House of Mouse wants you to tune in from home.

The Walt Disney Co. recently announced it will enter the on-demand video race with a new streaming video service it plans to launch in November, called Disney+.

For $6.99 a month—roughly half the price of a Netflix subscription—customers will be able to stream Disney’s trove of movies, television shows, and other content from its Disney, Pixar, Marvel and National Geographic studios. Disney also has plans to create original content exclusively for the service, including movies, documentaries and new TV series, starting in 2020.

With Disney+, Disney will compete in a multi-billion dollar streaming content market dominated by Netflix, which reportedly has 139 million subscribers and a market cap of $150 billion, and other providers including HBO and Amazon Prime.

Disney+ customers will initially have access to 7,500 TV episodes and more than 500 films, including well-known franchises including The Simpsons, The Lion King, Star Wars, and Marvel comics-inspired movies such as The Avengers, Black Panther, and Spiderman, according to the company.

Why is Disney launching a streaming service?

So-called direct-to-consumer video content is important to media companies because it gives them direct access to their customers, without an intervening television network acting as a middleman. U.S. consumers also spend more than $2 billion per month on streaming services, with more than half subscribing to at least one streaming service, according to CNBC.

Steep competition

The direct-to-consumer streaming content market is getting very crowded. Here’s a look at some of the other players shaping the market.

  • HBO, now owned by AT&T, and Netflix both spend billions of dollars annually on original content, and they dominate the direct-to-consumer market with original programming like Game of Thrones, and Orange is the New Black.
  • Amazon Prime video has produced 80 original TV shows, and has nearly 100 more in the pipeline, according to reports.
  • Hulu currently has nearly 100 original TV shows either available now or in the works. Hulu’s other owners include Disney and Comcast. (AT&T was also an owner, but Hulu recently bought out its shares from AT&T in a deal that values the streaming service at $15 billion.)
  • Apple recently launched Apple TV+, and is planning to spend $1 billion on original content, according to reports.
  • Cable companies Viacom and Comcast have both launched streaming services. Even Walmart is getting in on the act with its recently acquired video platform Vudu. Facebook is also experimenting with its own on-demand video service, called Watch.

More about Disney and Disney+

In 2017, Disney announced plans to purchase parts of 21st Century Fox in a deal worth $71 billion. That deal closed in March 2019.

At the time the deal was announced, some experts saw it as an acknowledgment that Disney had to compete more effectively against the new crop of media companies that deliver entertainment directly to consumers homes.

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