Weekly E-Newsblast

October 15, 2019



The Latest Disney+ Blow to Netflix is a $5 Subscription Deal

Disney is offering a limited-time, 3-year Disney+ subscription for $169.99. That’s $40 off the list price of $209.99, which translates to less than $5 per month.

A Disney spokesperson told Gizmodo that the deal, a Founders Circle promotion for Disney Fan Club members, was active until October 11th, however,

  1. It appears that individuals can still now purchase the subscription at the discounted $169.99 rate, even without being a member of the Disney Fan Club.
  2. As of October 15th, the offer is still valid via this link using the promo code “PARKSPASS3YEARS”

It’s worth noting that this deal does not include Hulu and ESPN+, which will be included in a Disney+ bundle for $13 when the service launches November 12th.

Source: Gizmodo

The Take

There’s a lot of hype surrounding the launch of Disney+, which is less than a month away. The service has already soft-launched in The Netherlands and pre-orders are open, but the company’s not done trying to lure subscribers in with discounted deals. Disney previously offered a similar three-year bundle this summer to its D23 Disney Fan Club Members, which broke down to $3.92 per month.

As the streaming wars intensify, so will subscriber churn as customers are expected to jump between multiple subscription video services, making “seasonal subscriptions” a thing. The average SVOD service churn rate has hovered around 18% for years, according to Kaltura.

The 3-year, $5 per month subscription deal is part of land grab strategy that Disney will parlay into leverage it can use against companies like Apple and Comcast. Additionally, by requiring subscribers to pre-pay $170 upfront, Disney’s making moves to eliminate churn immediately from the get-go.

According to a UBS survey, Disney+ could be looking at 54 million U.S. subscribers, after 43% of Americans said they’re “extremely likely” or “somewhat likely” to pay for new streaming service.

No matter how you slice all this, it’s not good for Netflix. In its Q2 earnings report in July, Netflix stated that it lost customers for the first time as a result of its content lineup and price hikes. Notably, Netflix reports its Q3 earnings tomorrow October 16th.

And as we mentioned last week, Disney is taking shots at Netflix outside of streaming by banning Netflix ads from airing on channels such as ABC, FX and National Geographic.

There’s lot of uncertainties here, including whether or not Disney+ will be available on Fire TV, but one thing we’re pretty confident about is that you shouldn’t expect Disney+ to be priced under $5 forever. Even the regular price $6.99 per month will most likely increase at some point.

By the way, yesterday Disney announced every movie and TV show available to stream in the US on day one.


Apple lays the groundwork for a subscription mega-bundle with Apple Music and Apple TV+

Apple has reportedly embarked on talks with music companies by way of laying the groundwork for a kind of subscription mega-bundle that, at this point, would include both Apple Music as well as the company’s new streaming TV service launching on November 1st.

This news comes via the Financial Times, which cites anonymous sources as saying the endeavor is still at an early stage and that Apple hasn’t even started talking about pricing details yet. However, it seems the music companies have displayed some initial resistance to this idea, perhaps thinking that adding more content to a bundle along with Apple Music for one monthly price might dilute the music-related revenue those companies are already receiving.

Source: BGR

The Take:

Apple has portfolio of unique subscription services including Apple Care, iCloud, Music, News+, TV+, and Arcade that would offer tremendous value if bundled together. Although the idea of all or some of these services being packaged together is not a new one.

In their quest to become an entertainment super-bundle, Apple faces early hiccups in its talks with record labels. Some executives fear that margins could take a hit if Apple undercuts the $9.99 monthly price it currently charges for its music streaming service.

But Apple still controls their own bundling destiny. While they have to license music rights and subsequently share revenues with the record labels, they solely own the rights to the content being created for Apple TV+.

Because TV+ content costs are fixed, Apple could theoretically bundle those services together for $12.99 per month without putting much pressure on music rights holders to offer a discount.

Like Disney, Apple is interested in amassing subscribers as fast as possible. And like Disney, bundling its services is the best way to get there. Apple Music has done well (currently around 60m subs), largely due to the fact that the app’s pre-installed on iPhones and in the pockets of millions of people. Historically, that strategy hasn’t been as successful working in the other direction — getting people to buy new Apple devices. But giving away TV+ for free to new buyers of iPhones, iPads, and Macs is a great start.


AVOD Service Tubi to Launch in the U.K., and Debut Kids’ Service in U.S. Variety

US TV Ad Spending Dips Amid Industry Changes. eMarketer

Disney+ might kill Blu-rays forever by streaming bonus features. Yahoo Tech

Quibi gets CBS, ESPN to sign on for original, short-form programming. Fierce Video

Netflix Goes All Out to Wow Children as Streaming Wars Intensify. The New York Times

Smart TVs are data-collecting machines, new study shows. The Verge

Lionsgate May Spin Off Starz Into Separate Company (Report). TheWrap

Cinedigm Announces Key Ad-Supported Growth Milestones. Global Newswire