The Walt Disney Company’s DIS new streaming service, to be titled Disney+, will be launched in late 2019. It goes without saying that Disney is trying to catch up with the likes of Netflix Inc. NFLX and Amazon.com, Inc.’s AMZN Amazon Prime. Disney’s big leap in the streaming space will pose significant challenges to the likes of Netflix and other rivals.
Disney+ Heats Up Streaming War
Disney+ will become home to subscription video-on-demand service for the newest live action and animated films from Disney and Pixar from late 2019. In 2017, Disney announced that it would pull out all its movies from Netflix starting 2019 and start streaming its past offerings through its own service.
Disney’s strength lies in its vast library that boasts some of the world’s most popular franchises. Moreover, the streaming service will also host content from Disney’s subsidiaries, Lucasfilm and Marvel, which means Disney+ will be offering all Marvel and Star Wars titles released so far. Also, the streaming service will offer new original shows and films from the Disney banner.
Earlier this year, Disney purchased Twenty-First Century Fox, Inc. FOXA in a $71.3 billion cash and stock deal, further beefing up its library. The deal will help Disney get control over the popular U.S. streaming service Hulu. Disney’s other streaming service ESPN+ reached 1 million subscribers within five month of its launch.
Can Netflix, Amazon Handle the Challenge?
Besides streaming its past offerings, Disney will also be investing in original content for Disney+. This is in line with what Netflix and Amazon Prime are doing already. Disney’s CEO Bob Iger Iger confirmed two original live-action Star Wars TV shows — a prequel to the Star Wars film Rogue One and a rebooted version of the High School Musical franchise — for Disney+.
Understandably, content will play a key role in the streaming war. Netflix’s CEO Reed Hastings told BBC that he is looking forward to going up against Disney once it launches its online streaming service. “We’ve been competing with Amazon for more than 10 years, so we’re used to healthy, strong competition,” Hastings said.
Last month, Netflix said that it plans to raise another $2 billion in debt to finance original shows and movies, and license content from others. Earlier, the streaming giant had said that it would spend $8 billion on content in 2018.
With 130 million subscribers, Netflix is well ahead in the streaming war. Amazon is estimated to have spent $4 billion on content last year, which is expected to increase this year, while HBO, owned by AT&T Inc. T said that it plans to spend $2.7 billion on original content. Disney, Netflix, Amazon and AT&T each carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
However, challenges are aplenty. Netflix charges a monthly subscription fee of $10.99 in the United States. Amazon Prime costs only $10 per month when purchased on an annual basis and offers a range of other services other than just access to Prime Video. Reportedly, the Disney+ subscription fee will be initially lower than Netflix, at least in the U.S. market. This may be because Disney’s offerings will be substantially less than Netflix in the beginning. That said, both original content and price will be integral in the streaming war.
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