When all the fellow streaming platforms are adding their original content capacities, on April 11, the biggest original content provider Disney Group finalized the pricing ($6.99/month) of its own streaming platform, Disney+. And the official US launch date is later this year on November 12.
Disney’s preparation and acquisition of BAMTech
Disney’s plan to launch its own streaming service has been around for quite some time. Its first official announcement was in August 2017 with Disney’s acquisition of an additional 42% of BAMTech for $1.58 billion, which gave Disney a controlling stake of 75%.
Before that, in August 2016, Disney acquired 33% of BAMTech (a spin-off from MLB’s broader digital business, MLB Advanced Media) for $1 billion.
BAMTech is the streaming technology provider for services including HBO NOW (launched in March 2015 with Apple being the exclusive launch partner; and Apple was promoting its Apple TV), National Hockey League (NHL), Major League Baseball (MLB), etc.
Disney Chairman and Chief Executive Officer Bob Iger talked about the streaming service on the BAML conference in September 2017.
What we’re going to do with the Disney direct-to-consumer app or platform is, first of all, we’re going to launch it in late 2019. We’re doing that for 2 reasons. First of all, as we exit the Netflix output deal, we don’t get access to our theatrical release movies until the beginning of ’19. Secondly, we wanted time to actually develop and build up original programming for the platform.
Following the 2016 transaction, Disney made plans to test BAMTech’s delivery and support of streaming video and other digital products from Disney|ABC Television Group and ESPN.
ESPN+ as a test-out
Following the 2017 transaction, Disney said it would launch its ESPN-branded multi-sport video streaming service in early 2018.
The new ESPN app and the ESPN+ service were launched in April 2018, provided by BAMTech. ESPN+ is priced at $4.99 a month or $49.99 a year.
What is different though, is that the content on ESPN+ is not a replacement of cable subscriptions (at least for now). ESPN Plus will not provide live access to ESPN’s main channels like ESPN and ESPN2 – you’ll still need a cable subscription to authenticate and watch. [TechCrunch]
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After all, ESPN is originally a cable business and sports are heavily rely on ads. ESPN+ is an ad-embedded streaming service (video ads).
In 10 month, the number of ESPN+ subscribers has reached 2 million.
On the other hand, ESPN itself (cable) lost 2 million subscribers in fiscal year 2018, with total subscribers of 86 million as of September 2018.
ESPN+ is expected to have 8-12 million subscribers by the end of FY 2024.
So Disney+ and its expectation
It will be one of (the most important one) the three pillars of Disney’s streaming services, alongside with ESPN+ and Hulu (will discuss separately).
Its direct competitors are Netflix and HBO Now. Bob Iger has specifically said it would be priced lower than Netflix years ago.
Priced at $6.99 a month or $69.99 per year, Disney+ is $2 lower than Netflix’ new basic monthly plan. Netflix announced the new pricing for United States in January 2019 to replace it original $7.99/10.99/13.99 lineup, effective May 2019.
The contents are powerful, including Disney, Pixar, Marvel, Star Wars, and National Geographic, etc.
It is targeting 60-90 million subscribers in five years, by the end of FY 2024 (September 2014) and 1/3 would be in the US.
Meanwhile, the Disney Channel has seen its subscribers ebb to 89 million, down from 92 million in fiscal 2017. [Variety]
And Netflix now has 148.8 million subscribers globally, 60.2 million from the US, as of 2019 Q1.
