The Mouse has roared. And Netflix can’t help but hear what it has to say.
Disney took the wraps off of its long-awaited Disney+ offering at its investor day Thursday. And if you want to soon see everything from most of the “Star Wars” movies to Julie Andrews singing her way across the Austrian Alps in “The Sound of Music” to all the adventures of “The Simpsons,” you’ll have to forget about finding those on Netflix, and pony up $6.99 for Disney+ when it goes live on Nov. 12.
And unlike how it treats streaming rivals such as Amazon, Hulu and HBO, Netflix probably won’t be able to just cite its subscriber numbers and Emmy and Oscar awards as proof of its success and just ignore what Disney is doing.
“It is early to reach a firm conclusion until we see the (Disney) content,” said Michael Pachter, media industry analyst with Wedbush Securities. “With that said, I think Netflix will lose people who subscribe for kids’ content, and will struggle to attract below median income domestic subscribers.”
Those factors–kids content and appealing to budget-conscious consumers–are seen as Disney’s biggest sources of ammunition against Netflix. In addition to the “Star Wars” titles, Disney+ will be the place to stream the content from Disney-owned franchises such as Pixar, Marvel, and National Geographic, which Disney recently acquired with its purchase of assets from 21st Century Fox.
All in all, Disney+ will launch with a library of 500 films and 7,500 TV show episodes to put in front of its subscribers. And at $6.99 a month (or an annual fee of $69.99) Disney intends to severely undercut Netflix’s monthly fees, which start at $8.99 a month to stream on one device at a time. Netflix’s most-popular option costs $12.99 a month for simulataneous streaming on two devices.
With such a catalog, and pricing plan, Disney estimates it will have between 60 million and 90 million subscribers worldwide by 2024. Netflix currently has 139 million subscribers around the world, and will likely hit 150 million subscribers before the end of the year.
“We are confident that the combination of our unrivaled storytelling, beloved brands, iconic franchises, and cutting-edge technology will make Disney+ a standout in the marketplace, and deliver significant value for consumers and shareholders alike,” said Disney Chief Executive Bob Iger, as unveiled Disney+ during its investor day event.
While Disney can launch Disney+ with catalog of content that would be the envy of any streaming rival, the company is also take a page from Netflix’s playbook by immediately getting into the original programming game. The company said that during its first year ago, Disney+ will launch more than 25 original series, and at least 10 new movies on the service, including a live-action series called “The Mandalorian,” which is set in the “Star Wars” universe. “The Mandalorian” alone is estimated to have come with a budget of $100 million to produce its 10 series episodes.
Pachter, of Wedbush Securities, said that even with Disney’s size and scope, he believes there won’t be a sudden flood of subscribers cancelling their Netflix accounts. However, what he does see potentially impacting Netflix is the abilty to grow its subscriber base, especially in the United States, where at the end of 2018, Netflix had 58.4 million paid subscribers. (Netflix will give its first-quarter business report, including its most-recent subscriber figures, after the close of trading on Tuesday, April 16.)
“Given that Netflix is approaching full penetration of median and above income households, they can only continue to grow if people subscribe to more than one service or people cut the cord,” Pachter said. “Cord cutting is happening, but not at a dramatic rate.”