Disney CEO Bob Iger wouldn’t reveal specifics about pricing for the ESPN- or Disney-branded streaming services launching soon, but he did say that the Disney service will be priced “substantially” lower than Netflix.
“That is in part reflective of the fact that it will have substantially less volume. It will have a lot of high quality because of the brands and franchises that will be on it, but it will simply launch with less volume and the price will reflect that.”
Currently, Netflix plans start at $7.99 per month and jump to $10.99 for HD and $13.99 for Ultra HD plans.
“It is our goal to attract as many subs as possible starting out. We think we’ve got some interesting opportunities given the affinity to Disney,” said Iger, adding that Disney will push the service toward its Disney-branded credit card holders, annual pass holders, members of D23, owners of Disney vacation club units and frequent visitors to the Disney parks.
He said that more pricing details for the services will be coming after the first of the year.
Given Iger’s comments today, it’s not far-fetched to believe that the service could be priced around $5 per month as analyst Michael Nathanson predicted earlier this year.
“Disney’s pricing strategy will be a key gating factor in determining the rates of adoption. If there are truly complementary services, it would be logical to offer a lower price point to consumers to denote the ‘add-on’ intention of Disney vs. a higher price point, which could signal a replacement option,” wrote Nathanson.
Iger also offered some additional information on the types of content viewers can expect from the Disney streaming service. He said the service will use Disney, Pixar, Marvel and “Star Wars” content but that everything has to adhere to Disney’s “G-rated” standards and filtering features will be available for parents letting their kids use the service.
Iger said Disney hasn’t ruled out the possibility of licensing third-party content for the service, “provided the product fits with the Disney brand.” He said ABC Productions could end up creating content for the Disney-branded service.
Iger also said that Disney doesn’t plan on selling ads for the streaming service—he didn’t rule out sponsorships—but that the ESPN streaming service launching in spring will be ad-supported and will use BAMTech for addressable ads and dynamic insertion during live events.