Today was a disruptive day for the streaming industry.
Disney launched its new direct-to-consumer streaming service, Disney+. The launch was announced by Disney CEO Bob Iger last November and will bring all of Disney’s historic archive to one place, along with new Disney original content.
Content from other Disney brands, including Pixar, Marvel, “Star Wars,” and National Geographic will also be included with Disney+. The service will also include all 30 seasons of “The Simpsons.”
This morning’s launch was accompanied by several technical problems. One website showed a peak of 7,600 users experiencing problems with the site. Problems reportedly ranged from not being able to log in or set up a profile, to show’s not loading, to long wait times for customer service.
Disney+ will be priced at $6.99, which is $9 cheaper than Netflix’s comparable premium plan. Both plans allow users to stream on four devices at once. The comparison between the two services has been a hot topic of conversation in recent months, especially as major studios have begun to pull their original content off of Netflix so they can have it for their own streaming platforms.
For example, Netflix announced earlier this year that it will lose it’s most streamed show, The Office, to NBC Universal’s upcoming direct-to-consumer streaming service. Additionally, Disney will not be renewing its 2016 contract with Netflix that gave the streaming service access to Disney movies including “Pirates of the Caribbean,” “The Incredibles 2,” “Thor,” and several “Star Wars” films.
Jeffrey Korchek, the executive vice president of Business Affairs and Strategy for Sony Pictures Animation, believes Disney’s price puts it in a strong position to compete with Netflix, which he sees as struggling.
“I think Netflix has its own financial challenges, as a standalone service with declining subscriber growth,” said Jeffrey Korchek. “The big difference from a broader economic perspective is that Disney, similar to Warner, ATT with HBO max, also similar to Comcast with Peacock, is that these companies are very large and have different ways of making money: broadcast networks, streaming platforms, movie theme parks, cruise ships, cable networks, whereas Netflix only makes money from its subscribers."
Netflix has responded to new players in the streaming industry by amping up its original content production. The company spent $12 billion on content in 2018 and is expected to spend $15 billion in 2019. Along with all this spending, Netflix is running a $3 billion negative cash flow, according to Variety.
Korchek says the large increase in original content might not be a good thing.
“One of the things about Netflix that will be an issue going forward is the extreme amount of content and whether people are going to be able to find that content on the service and whether that level of production that they have is sustainable," said Korchek. "For example, major studios like Sony release 18 movies in a year. Netflix is releasing 18 movies this quarter. It’s hard to make that amount of content and have it all be good.”
USC students gave mixed reviews as to whether they would subscribe to the new service. Rebecca Cimini, a senior majoring in business of the cinematic arts at USC, said she’s not too excited about all of Disney’s new content, so she’s going to wait to make a decision on whether to subscribe to Disney+.
“I feel like I’m going to wait a couple of weeks because there’s nothing in terms of the new content that like really has me itching to subscribe and will draw me in to watch right away,” said Cimini.
She added the price made the service very competitive.
“I think relative to the other streaming services that are out there right now, Disney is coming in at a competitive price,” said Cimini. “That might really help in gaining the initial base of subscribers. And then I foresee them raising that in the near future ... once they realize that the subscriber base might be plateauing and they need to bring in more revenue.”
Lilitho Mo, a first-year film production major at USC, cited cost as a concern when subscribing to the new service.
“I don’t know,” said Mo when asked if she would subscribe to Disney+. “Depends on how much they cost because I’m barely able to pay for Netflix upon other stuff.”
When told it would only cost $6.99 initially, Mo shifted her answer a little bit and said she’d consider it after checking out the free trial.
Charles Joachim, a first-year film major at USC, said he would add Disney+ to his streaming suite, which also includes Netflix, Hulu, and HBO. He said it would probably result in him using Netflix less, but not unsubscribing.
“A lot of [Disney’s] content is on Netflix, and I feel like they’re going to lose a lot of that to Disney,” said Joachim.
Nearly 500 films and 7,500 TV episodes are now available to be streamed on Disney+. Disney has predicted their service will have eight million subscribers by the end of this year and as many as 90 million by 2024, according to the New York Times.