Brian Messing, Editor-in-Chief
The streaming wars intensified last Tuesday when Disney released its new streaming service, Disney+. The service is priced at $6.99/month, and is also available in a bundle that includes Hulu and ESPN+ for $12.99/month , the same price as Netflix’s most popular plan.
Disney+ features many great films and TV shows. The service launched with several originals that received a lot of media attention, including the star wars-themed show, “The Mandalorian,” and a live action remake of the old Disney classic, “Lady and the Tramp,” among others. Additionally, Disney+ includes a number of classic Disney films that are “out of the vault,” including titles such as “The Little Mermaid,” “Beauty and the Beast,” and “Aladdin.” Newer Disney titles like “Moana” and the “Pirates of the Caribbean” series are also available.
In addition to content that is easy to directly associate with Disney, Disney+ also includes nearly all of the Pixar films (including classics such as “Toy Story” and “Cars”), many of the Marvel films (such as “Avengers End Game” and “Iron Man”), as well as the six original “Star Wars” films, and two of the more recent Disney produced “Star Wars” films.
The service marks a pivotal point in the so-called “Streaming Wars.” While hitherto film and television studios made money by licensing their content to companies with streaming platforms such as Netflix and Amazon, Disney+ is the next example of content creators returning their content to their own streaming platforms. Disney is in the process of removing most of its content from Netflix and other platforms, and moving it to either Disney+ or Hulu, with the former receiving family friendly content and the latter receiving content targeted to adults. Additionally, AT&T (NYSE: T), owner of Warner Media, is recalling much of its licensed content, including the popular sitcom “Friends,” to its new streaming service HBO Max, which is set to launch in spring of 2020. Comcast (NASDAQ: CMCSA), the owner of NBC Universal, is also following suit by returning “The Office” from Netflix to its new streaming service Peacock, that will also launch in spring of 2020.
Disney reported on Wednesday that Disney+ had already hit 10 million subscribers in its first day, sending shares of its stock (NYSE: DIS) to an all-time high. Disney stock traded at $144.67 as of market close on Friday, up over 32 percent this year. Analysts have indicated that the company is positioned well for the future of entertainment through its acquisitions of content, vast library of existing content, and willingness to embrace new forms of media.
While Disney has enjoyed a bullish year on the stock market, the same cannot be said of Netflix. In July, Netflix (NASDAQ: NFLX) announced its first ever drop in domestic subscribers. This led the stock to fall in September to a loss compared to where it traded at the start of the year. Netflix has since rebounded and is up over 10 percent on the year as of Friday. Many fear that the loss of licensed content will adversely affect Netflix, given that eight of the top 10 most popular shows on Netflix are licensed, and 80 percent of the time consumers spend streaming on the platform is spent on licensed content. Additionally, a recent study shows that 25 percent of Netflix subscribers will likely cancel their subscriptions once “Friends” and “The Office” leave the service.
However, the news is not all dark for Netflix. On the same day as the launch of Disney+, Netflix announced a new partnership with Viacom that included both new-licensed content from the company and the opportunity to create new programming with the Viacom-owned character, SpongeBob Squarepants.
Brian Messing holds positions in The Walt Disney Corporation, AT&T, and Comcast. Brian Messing does not hold a position in Netflix.