Disney fixes streaming service price

Walt Disney Co priced its highly anticipated streaming video service below Netflix in an aggressive move to challenge the dominant streaming service and entice families to buy yet another monthly subscription.

Disney said its new family-friendly streaming service will cost $7 monthly or $70 annually with a slate of new and classic TV shows and movies from some of the world’s most popular entertainment franchises in a bid to challenge the digital dominance of Netflix.

The ad-free monthly subscription called Disney+ is set to launch on Nov.12 and in every major global market over time, the company said. In addition to Disney films and TV shows, it will feature programming from the Marvel superhero universe, the “Star Wars” galaxy, “Toy Story” creator Pixar animation the National Geographic channel and the entire library of “The Simpsons.”

“What we are putting forward is an aggressive strategy,” Disney Chief Executive Bob Iger told analysts at the presentation. “We’ve got to be very serious and all in on it.”

The company set a target of luring between 60 million to 90 million subscribers and achieving profitability in fiscal year 2024. It plans to plow a little over $1 billion in cash to finance original programming in fiscal 2020 and about $2 billion by 2024.

The cost of the service was lower than the $7.50 per month that Wall Street analysts expected on average, according to a Reuters poll, and could likely be seen as a stronger bid to appeal to more customers.

Patrice Cucinello, a director at Fitch Ratings, said Disney had priced the new service “very affordably.”

“Disney is approaching streaming offerings, particularly Disney+, with guns blazing, looking to take share and quickly ramp subscriber growth,” Cucinello said.

Reuters