Disney streaming service is set to launch in 2019, and Netflix Inc, Inc. (NASDAQ:NFLX), which will grow even bigger by then, will be a major threat to it. Disney CEO Bob Iger, talking about the company’s strategy to make the service popular, confirmed that Disney will price its subscription-based service “substantially” lower than Netflix.
Disney streaming service to have high-quality shows
“We’ve given a lot of thought to pricing,” Iger said during the earnings call on Thursday. “I can’t get specific with you yet, because we haven’t determined it yet. It will be substantially below Netflix because we’ll have substantially less volume.” Iger, however, noted that though the volume will be less, it will be of high quality “because of the brands and franchises that will be on it, but it will simply launch with less volume and the price will reflect that.”
Iger has also hinted that the lower price would be a promotional strategy, and as the service gains ground, it would increase the pricing.
“I don’t want to say we’re going to walk before we run,” he said.
Iger made it clear that as the production ramps up and new titles get added, pricing will be adjusted to reflect that. Iger’s comment does echo Netflix’s strategy, which had hiked the price recently noting that pricing is all related to volume.
Further, Iger confirmed that the new streaming service won’t irritate customers with commercials. The company plans on allowing commercials for its sports streaming app, but there are no plans to “have the programming that airs in the direct-to-consumer service interrupted by commercials,” Iger says, adding sponsored programs could be a possibility.
Exclusive series for its streaming service
Pricing is not the only tool that Disney will use. To attract more subscribers, Disney would also develop an original Marvel series exclusively for its streaming service, notes CBR. Disney has already confirmed that Marvel Cinematic Universe movies will move from Netflix to the Disney streaming service once it is launched. Also since Marvel TV and Netflix have not announced any series after The Punisher, there are good chances it could be their last.
The Wall Street Journal recently reported that Disney would develop a series for their own services to stand against other streaming services. Ben Fritz of the Wall Street Journal notes that Disney would also develop shows based on Disney properties such as, Monsters Inc., Marvel, and High School Musical. Marvel’s New Warrior could be one of the many series to come to the Disney streaming service. The series was originally ordered for the ABC Family.
Disney also gave a similar hint during the recent earnings call. The entertainment company warned that the profits for the next fiscal year would be hurt by investments in theme parks, TV shows (including programs for the new streaming service), and movies. The company also revealed plans to develop a Star Wars TV show for its new streaming service.
On Thursday, Disney shares closed up 1.48% at $102.68. Year to date, the stock is down over 1%, while in the last one month, it is up over 1%.