Walt Disney Co is striking back at Netflix with its own streaming television service that will include the iconic "Star Wars" movies Photo: GETTY/AFP/File

Disney throws down gauntlet in war on Netflix

By Rob Lever

The battle is on. Walt Disney Co is bringing its biggest weapons to a new streaming service, including "Star Wars" and Marvel superheroes, in what is expected to be bruising war with Netflix and others for television dominance.

The media-entertainment colossus announced its Disney+ streaming service would launch in November in the United States and gradually expand internationally. The new service's subscriptions are due to start at $6.99 per month -- less than streaming leader Netflix's most basic $8.99 plan.

Disney+ will be packed with blockbuster movies and TV shows from the Disney library, including its recently acquired assets from 21st Century Fox. That includes shows and films from Pixar animation studios, the Marvel franchise of superheroes like "Spider Man" and "Captain America," National Geographic documentaries and of course the "Star Wars" series.

Disney said it would include all 30 seasons of "The Simpsons," family-friendly titles like "The Sound of Music,"and "Malcolm in the Middle" and its forthcoming "space opera"series "The Mandalorian."

Analysts says Disney's announcement shows it is giving no quarter as it battles Netflix, Amazon Prime Video, Hulu and an upcoming service from Apple.

"The biggest surprise was the price -- $6.99 per month, which was much lower than many people were expecting," said Alan Wolk, co-founder of the TVREV consulting firm. "It's also ad-free, which was unexpected, as the conventional wisdom was that they would go to a hybrid Hulu-style model, with both ad-supported and ad-free options."

Wolk said the programming "is exactly what you'd expect from Disney and will appeal to families with children." He said the content will mean the new service won't compete head-on with Hulu, which is 60 percent owned by Disney.

The move "allows them to position Hulu as their edgier, adult offering," he said.

Disney has predicted it will sign up 60 million to 90 million users over the next five years. Some analysts have said they expect Disney's new service to grow quickly and eventually top Netflix's 140 million worldwide subscribers.

Analyst Neil Macker at Morningstar said Disney "came out swinging at its investor day with an aggressive price point" for its streaming service.

"We were pleasantly surprised by the content levels" announced at Thursday's investor event, Macker said. "While it is smaller than Netflix, we think the Disney+ library will be deeper in terms of quality."

Tuna Amobi of CFRA Research said Disney+ will launch with "an unparalleled array of branded TV/film content" and as a result "could be a potential game-changer in a rapidly evolving streaming landscape."

Amobi said Disney also has the potential to "bundle" its new product with Hulu and its recently launched ESPN+ sports streaming service to give consumers a wider choice of content.

But some analysts argue that rivals will not take the competition sitting down and that nimbler internet firms may prevail.

Richard Greenfield at BTIG Research noted that Disney's venture may be hurt by long theatrical "window" that keeps films out of streaming for months, and from longstanding deals giving rivals some of its content.

"We wonder how the company will explain what is and is not available on Disney+ both domestically and abroad," Greenfield said in a research note. "Will consumers understand that a new Marvel movie is available in theaters, but not on Disney+ for eight months?"

John Meyer, analyst at the investment firm Transpire Ventures, said Netflix still has the upper hand in the market.

Meyer said Disney may "carve out a small niche" among families and young viewers but doesn't pose a serious threat to Netflix.

"Netflix now knows what people want more than anybody," Meyer said. "After all, they are a tech company at heart and have enormous power with the data they capture on their millions of subscribers, which helps them design what original content to create."

Laura Martin, analyst at Needham & Co., disagrees, saying Disney with its well-known brands and franchises will eventually overwhelm Netflix.

"We believe Netflix cannot win" such a war because of Disney's cost advantage from owning a vast amount of content.

"Disney products reach 100 million households per year, which lowers Disney's customer acquisition costs," Martin said in a note to clients.

Martin said that in polling, US customers say they plan to use only two or three streaming services and that as a result, any growth in Disney+ will significantly weaken Netflix.

© 2019 AFP

©2019 GPlusMedia Inc.

Login to comment

Martin said that in polling, US customers say they plan to use only two or three streaming services

I'll always use netflix- however, being a brand loyalist, I'd be very curious about Apple's streaming service.

-2 ( +1 / -3 )

Hopefully this price competition will discourage Netflix for raising their prices yet again!

1 ( +1 / -0 )

Netflix price is going up, again.

I'll be looking to switch soon.

1 ( +1 / -0 )

Success will depend on new programming.  Just giving access to old stuff will not be enough.  Good for Netflix to get competition.  time to short their stock.

1 ( +1 / -0 )

Wished they had a cable news service as easy as movie/documentary streaming services nowdays....Netflix is good and I will be looking forward to testing this new Apple TV+, but wished they had tv streaming services you only provide your credit card and you're ready to go.

Cable TV contracts are still a pain in the ass when working here and there in different countries.

1 ( +1 / -0 )

Bittorrent is the future

1 ( +2 / -1 )

Disney is such a bore as it is for children. I do not watch their products!

-2 ( +2 / -4 )

Disney isn’t necessarily aiming only at Netflix. They are doing what they have always done. Corner the child and family market.

Still. Most of these streaming services are still working towards profitability. That is why Netflix is raising their prices so much.

One of these streaming companies will go bust soon. Most likely Netflix since it operates on mostly debt.

1 ( +2 / -1 )

Disney is such a bore as it is for children. I do not watch their products!

Thanks for taking valuable time to come here today and tell us. Disney is for all ages, and not just confined to kids stuff. Besides, we're all big kids at heart.

-1 ( +1 / -2 )

Disney-owned TV series and movies can only go so far.

It'll depend on how well they license non-Disney properties on their streaming service.

Would competitor studios cooperate with them? How much would they promote non-Disney properties? Etc.

1 ( +1 / -0 )

Of course Disney will have an upper hand gradually. When a kid is crying, a parent will have to stop watching his thriller series on Netflix and switch to Disney.. :)

-1 ( +0 / -1 )

LIke most parents...we have both or all three, or whatever...lol But arguably enough because Disney owns pretty much everything...Jeez, the own a 51 percent stake in seven holdings Japan ( 711)...So there is no way to know how deep their reach is and how far they can go...They own most of the filming companies..and so on and so fourth..I know this because I used to work for Disney so its not really an if, its more like when. When I was working at the original studio office ;) 5 - 6 yrs ago they already had been working in taking over Netflix. So its really, what is move after that...Disney is not going to take grown up films away, just to be clear. They would never do that.

0 ( +0 / -0 )

Login to leave a comment

Facebook users

Use your Facebook account to login or register with JapanToday. By doing so, you will also receive an email inviting you to receive our news alerts.

Facebook Connect

Login with your JapanToday account

User registration

Articles, Offers & Useful Resources

A mix of what's trending on our other sites