Walt Disney CEO Bob Iger. (Reuters)
Walt Disney CEO Bob Iger. (Reuters)

Disney+ undercuts Netflix with $7 price, launching costly battle

  • Disney+, Walt Disney's streaming service, undercuts Netflix's $11 plan—its most popular—by several dollars
  • Disney+ will weigh heavily on Walt Disney’s finances and isn’t expected to break even for about five years

Los Angeles: Walt Disney Co. will charge $7 a month for its streaming service that debuts 12 November, a gambit to undercut rival entertainment giant Netflix Inc. in an increasingly crowded field.

The company unveiled the service on Thursday on a sound stage used to make the original Mary Poppins, delivering an Apple-style presentation of the online product. The platform will be several dollars less than Netflix’s most popular plan, which runs $11, and it will weigh heavily on Disney’s finances. Disney+ isn’t expected to break even for about five years.

Beyond the price and technology, the service will live or die based on its content -- and that’s where Disney made a big statement. Disney+ will feature an arsenal of kid-friendly programming, including 13 classic animated movies, 21 Pixar features, original series, and material from its Marvel and Star Wars franchises.

“We are confident this is a product people are going to sign up in droves to have," chief executive officer (CEO) Bob Iger said in a Bloomberg Television interview.

Disney+ will begin rolling out to the US, western Europe and Asia in the first fiscal quarter, near the end of the calendar year. It will then arrive in eastern Europe and Latin America a year later.

Disney plans to spend $1 billion on streaming programming in the next year, and it doesn’t expect to make a profit until fiscal 2024, when the platform could have 60 million to 90 million customers. Two-thirds of those subscribers will be overseas, the company predicted.

Disney+ also will include The Simpsons, a show acquired in Disney’s purchase of 21st Century Fox Inc. entertainment assets last month.

Borrowing the show’s cheeky tone, Disney showed a clip of the Simpsons family with a statue of Darth Vader on one side and Iger on a pedestal nearby. A signed photo of Rupert Murdoch— the billionaire mogul behind Fox—was in the trash. There was a “Welcome Synergy" sign above.

“I salute our new corporate overlord," Bart Simpson told his family, while holding Disney mouse ears. “Put on those ears."

Disney’s newest theatrical films will head to the new streaming platform after their runs in movie theatres and home video. That includes Captain Marvel and the upcoming Avengers: Endgame, Aladdin and Toy Story 4. The company previously had deals with Netflix and others to offer its content, but Disney gave up those partnerships— and the revenue—to make its own service more desirable.

For Iger, Disney+ is a bit of a swan song. The company’s longtime steward reiterated Thursday that he expects to step down as CEO at the end of 2021, when his contract expires.

This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.

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