Most Households Have Two or Three SVOD Services

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At its investor event on Thursday, Disney finally gave details on its much-buzzed SVOD service Disney+, shocking journalists and competitors alike when it announced the service will cost just $6.99 a month or $69.99 a year.

The new platform will initially be available exclusively in the US, and is set to launch in November. The service will be ad free, breaking with Hulu and ESPN+’s ad-supported models, and subs will be able to download all content across the Disney+ platform to their devices.

Here’s what it means: Disney+ will be both among the least expensive options in the SVOD market and the most desired in terms of its exclusive, original content.

Pricing: Our exclusive data puts the average consumer’s price ceiling at $38 a month for SVOD — that means most people have room for another service. About two-thirds of respondents subscribe to no more than three SVOD services. Even those who sub to all of Netflix, Hulu, and Amazon Prime Video — the three most popular services — will spend only $32 per month. Disney+ could nestle in neatly at $6.99, and even less for annual subs.
Original content: Disney touts 95% brand awareness and a fan base of over 1 billion. The service will include much of the Disney content that got them there, centering around its major brands like Marvel, Disney animation, Pixar, Star Wars, and National Geographic

The bigger picture: We see Disney’s SVOD services hitting high subscriber rates, which will make up for the losses it has taken on in building Disney+.

Disney has foregone significant licensing revenue as it pulls back its original content to keep it exclusive to its new service. In pulling licensing deals from Netflix, Disney is projected to walk into an estimated $500 million loss per year overall.

Disney has also invested a ton in backend tech and ensuring an expansive library of original content, netting operational losses of $136 million for the 2018 fiscal year. This costly strategy was likely the only path to SVOD success for the Mouse House, as original and exclusive content are the differentiators in this market.

Given the Disney brand’s weight, these …read more

Source:: Business Insider


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Why Disney+ will pay for itself fast (DIS)

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