Disney+ might be the new streaming kid on the block, but it wasted no time in attracting 28.6 million paid subscribers. That's the number as of
Disney+ might be the new streaming kid on the block, but it wasted no time in attracting 28.6 million paid subscribers. That’s the number as of Monday, according to the company’s CEO Bob Iger during its first-quarter earnings call today. The company reported 26.5 million as of the end of its most recent quarter but has grown even more since that time.
Disney’s CEO attributed the current success of the streaming service to content like The Mandalorian series which features the popular Baby Yoda character. Iger pointed to both as an example of “the company’s ability to connect with audiences.”
Connecting with audiences has always been a strength of Disney, which is as good as anyone at promoting its brands. Disney+ gives it a powerful platform to showcase those brands, including its classic animated films, Pixar, Marvel, and of course, Star Wars. Combining all of those into one service, instead of licensing them out to other platforms–like Netflix–has apparently paid off.
Of course, Netflix isn’t going anywhere. It is, however, clearly under pressure from new competition from media and tech giants like Disney and Apple. And while Netflix’s recent quarterly report shows that it continues to add subscribers, most of those are outside of the U.S., where growth has slowed significantly.
On its earnings call last month, Netflix cited its most recent price increase as one of the reasons for slowing growth. The company increased the price of its standard service to $12.99 per month in January of 2019, a result of the increased costs of creating its own content. Netflix spent a record $15 billion on licensing and creating original content in 2019, far more than any other service.
Disney hasn’t shied away from spending on the new service either, reporting a $689 million loss on $4 billion in revenue for all of its streaming services (which also include Hulu and ESPN+). Disney’s willingness to spend, combined with its massive built-in owned content library show exactly why Netflix should be worried about the success of Disney+ so far.
A recent study by research firm Piplsay says that 36 percent of Americans have dropped another subscription in favor of Disney+. That same research shows that more than half of Americans say that Disney+ is as good or better than Netflix. That could be partially due to the fact that, according to Reelgood, Netflix today has 47 percent less content than it did eight years ago.
That could spell danger as consumers decide which services provide the best value for their families. Disney’s paying subscribers pay $6.99 per month, not to mention the number of subscribers who get the service for free with a Verizon Unlimited plan. That’s a lot less than $12.99 per month.
It also highlights the primary threat Disney+ presents to Netflix: The combination of a hugely popular content library, aggressive pricing, and a growing subscriber base mean that the battle to stay on top is going to get much more difficult for the current leader. They don’t call them the streaming wars for nothing.
Published on: Feb 4, 2020
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