Streaming and cord-cutting is changing entertainment for consumers and businesses alike. Internet service providers, media companies, streaming services and content creators are all doing their best to stay ahead in an ever-shifting landscape. In this new world, content is king. Disney, who has a near monopoly on some of the most popular animated content, clearly started looking at the aforementioned landscape whilst deciding to pull its content from Netflix and start its own streaming service. We now have a rough idea of just how much that decision will pay off, as the service could be valued at up to $25 billion.
According to a Morgan Stanley note, Business Insider is reporting that Disney's attempt at world domination could attract 30 million subscribers over the next decade, which would put its value at $25 billion. If all goes as planned and Disney's streaming service hits that subscriber number, and the company will need to, the streaming service could generate $5 billion in revenue. Disney wants a piece of the one billion households worldwide that pay for TV and likely are fans of Disney content. While this might seem like a huge loss for Netflix, so far, the latter company doesn't sound too worried.
Netflix once delivered DVDs via postal mail to customers before transitioning into streaming licensed content it had to pay for. The streaming service realized it could make more by just creating original content to drive people to Netflix services. Nowadays most people subscribe to Netflix for the brand's original content like Stranger Things and The Crown, and Disney seems to be latching on to the same idea.
Many media companies are realizing that instead of licensing their content to Netflix, Amazon or Hulu, they can just start their own streaming services and cut out the middleman to increase their profit. This could lead to an environment where every media company has its own streaming service and the one with the best content wins. Disney owns a plethora of popular brands and it has built a great reputation for putting out a quality product. In addition to Disney proper, Pixar, Marvel and Lucasfilm could all show up on the platform.
As of now there are still a lot of questions about what form Disney's streaming service will take, how much it will cost and what will be on it. We know that there will be two versions of the service, one for sports content expected in 2018 and one for Disney content in 2019. Live sports were long considered the bulwark against cord-cutting, but as cable bills get more expensive and millennial viewers eschew sports, Disney is realizing that the company can offer sports in a streaming package, as well as on traditional cable. The real question though is: At what point does having all these streaming services surpass the cost of cable in the first place? It'll still be a while before the new services are available, but we'll keep you updated on streaming options every step of the way.