Pixar short Lou

Disney has announced its own streaming service is coming in 2019, but with so many alternatives already on the market, one of the major factors that will determine how many people subscribe will be the cost. While Disney has yet to reveal any specific numbers, CEO Bob Iger has given us a ballpark to play in, as he says the service will cost less than Netflix. According to Iger...

We've given a lot of thought to pricing. I can't get specific with you yet, because we haven't determined it yet. It will be substantially below Netflix because we'll have substantially less volume.

Netflix just raised the price of the standard tier service to $10.99 per month, and while it's anybody's guess what Bob Iger's definition of "substantial" is, we could be talking about pricing similar to what Hulu offers, at $7.99 per month, or potentially even less. The reason for this, as Iger explained on a recent investor call (via Polygon), is that he admits that Disney's service will have substantially less content at the beginning than Netflix currently does.

The current expectation is that the Disney service will launch with around 500 movies and 7,000 episodes of television, which is no small quantity, but it's still only about 25% of what Netflix is currently running. It's nice to see that Disney isn't going to expect people to pay the same price for a fraction of the content. Which is not to say that both of those things won't eventually change. Bob Iger was also very clear that as the volume of content increases, the price will as well.

This is probably the best possible way for Disney to start. If the service starts out at a lower than average price point, $5 or $6 per month, more people will be willing to add that on to their existing TV packages or other streaming services. Once they have the service, they'll be less likely to cancel it, even as the price increases, especially if the quantity of content goes up along with that price.

The other thing that Disney potentially has going for it is that beyond quantity, the company has a certain level of overall quality that it's known for. Disney films are some of the most popular ever made. If the service launches with every Disney animated feature, Pixar film, Marvel and Star Wars movie, it could provide a huge value, and still have hundreds more movies available. Even if Disney only has 500 movies to start, the right 500 movies could make the service a must have.

As we're still more than a year out from the Disney streaming service there's a lot we still don't know, but it certainly looks like the studio is on the right track. If nothing else, it sounds like we can expect an opening price point that could make the service very attractive.

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