Recently it has been reported that Netflix has some serious debts to pay off in the future, but that it’s all part of their plan to stay ahead as the top streaming service in the market. We also know that there are other streaming services like Amazon Prime and Hulu that have been making a push for original content to attract subscribers. Yesterday we got news that Disney is pulling out of Netflix and planning to also get at least two direct to consumer streaming subscription services: one for ESPN and the other for Disney films and television shows.
Variety has some details on Mickey Mouse’s move into the streaming subscription world. Disney will be ending their three year output deal with Netflix, beginning with their 2019 theatrical releases as their streaming services will include their Disney and Pixar films. No details about their Marvel Entertainment and Lucasfilms franchise films have been given., but just like they have created their own pop culture show D23 to showcase their properties, I would not surprised if they moved those as well.
Their ESPN sports package sounds promising with one big problem. Their new service will not include any NFL or NBA games, which is a huge draw for sports fans. This is backed up by the Fluent survey, where 74% of consumers said football was the sport they would pay for on a streaming service while 49% of them picked Basketball. This is something hopefully they can address in the near future.
It seems like Disney will be trying to adopt a dual distribution model like HBO has as it will try to sell retail OTT services directly to consumers and continue to sell wholesale TV programming through the usual channels. Of course the success of their services depends on what price point they decide to offer their product. This will determine how quick they can bring in subscribers:
“It will be interesting to see how Disney prices their services — and if it will be low enough for a large enough number of Americans to sign up for them in addition to their core Netflix subscriptions and the growing number of people getting on Amazon Prime,” said Jordan Cohen, Fluent’s chief marketing officer. A low cost for subscriptions is the main reason that U.S. consumers sign up for streaming services according to a 2017 survey conducted by ad-tech vendor Fluent of households with annual incomes of over $50,000.
With so many other streaming subscription services out there, it was only a matter of time before Disney got their own. On the plus side for Netflix this will free up about $300 million in annual revenue for Disney according to Morgan Stanley, which in turn Netflix can now use to spend on other content, but with so many different companies starting their own streaming services, like Disney and DC Entertainment, how much pressure does this put on Netflix now that there are a lot more services to choose from? Chime in below!
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