Disney+ examined and compared
April 15, 2019
Disney unveiled its new streaming service last week, and the investment community has studied the promised offerings and pricing strategy, in particular with its impact on European broadcasting.
Disney+ is set to launch on November 12th in the US with a Western Europe roll out planned for Q2 2020. The basic package price will be $6.99/month, in line with consensus expectations and below the basic Netflix package at $9. By 2024 the group aims to reach 60 million – 90 million subscribers and expects one third of those subs to come from the US and in the mid-term.
Disney+ is planned to be profitable by 2024 with most of the losses expected in the next two years. Disney suggested it could lose up to $150 million ($100 million studios and $50 million in the network) of licensing revenues in FY19 due to the termination of some of its contracts as it launches Disney+.
Disney+ is planned to be anchored by Disney Studio, Pixar, Marvel, Lucasfilm and National Geographic content. It will also feature an array of exclusive original series and movies – including a live action Star Wars series, and multiple live action Marvel series. Disney’s other video platforms, for instance Hulu and ESPN+, will remain independent.
RTL, according to equity advisers at investment bank Exane/BNPP, is the only pan-European broadcaster whose online VoD pricing is currently public. RTL charges €4.99 per month for its bundle (from €2.99 previously).
For comparison, Netflix charges €7.99 per month for its basic package across Europe, in line with Amazon’s subscription price. Netflix has now announced a price rise for subscribers in Germany, Austria, Switzerland and Lichtenstein with immediate effect (to €12, from €8 for basic tier). “We expect Netflix to raise prices across Europe to the same level,” says the bank.
The launch of Disney+ will feature an elaborate marketing campaign paired with key events around new movies. Disney aims to have reached 95 per cent awareness at the Disney+ launch among its target group. To give some context Apple’s SVoD app will be launched in 100+ countries in the autumn.
As to promised rival services (to Netflix, Amazon Studios and now Disney) the bank’s report says:
- Germany. The revamped TVNow, RTL’s VoD platform, has already been launched. ProSieben plans to launch its new 7TV SVoD platform in summer 2019.
- France. Salto, the French OTT joint venture, which is expected to combine the content catalogues of France TV, M6 and TF1, is expected to be live by year-end. The platform is subject to approval by the competition authority.
- UK. The BBC / ITV Britbox streaming platform is expected to launch in the second half of 2019.
- Spain & Italy. The HbbTV-based platform created by Atresmedia, Mediaset Espana and RTVE was launched last year. The platform currently offers seven-day catch-up and a better electronic programming guide and also allows viewers to watch from the start of a programme currently on air. This platform is expected to develop into an OTT TV service in a later stage. Mediaset Play offers live streaming and restart features for the Italian broadcaster’s channel portfolio. It also offers access to some on-demand content.
“RTL has announced €350 million investment in its SVoD platform over the next three years, of which €300 million is dedicated to new and exclusive content. ProSieben will invest c€100 million pa over the coming four years jointly with Discovery. The investment will be spread across content, tech and other costs. ITV has guided for incremental SVoD investment of £25 million in FY19 and £40 million in FY20, of which most dedicated to content. The size of the investment is set to decline thereafter. France TV, TF1 and M6 are each expected to invest €15m in Salto,” adds the bank.