Cutting the cord
Frugal Tips,  Thoughts

Disney+ and the Deluge of Streaming Services

Disney+ is the latest streaming offering from one of the largest publishers of content in the world. During Disney’s 2019 investor day, Disney announced a November 12 launch date for their new product. Priced attractively at 6.99/month or 69.99/year, Disney+ is yet another service trying to take a cut of the big streaming pie.

Streaming services took the world by storm with Netflix’s original offering. At the time, Netflix was an all you can eat buffet where viewers could get a ton of content for one low price.

No longer did we have to pay $120 for a package that included tons of crap we didn’t want. We could pay much less and get a lot of crap in one big affordable package. Best of all, we could watch it any time and there were no commercials. Netflix was awesome!

However, like all good things, it didn’t last. Companies like Disney, Comcast and Time Warner realized that giving one company all their content wasn’t good for their business. On top of that, they also wanted to get in on the high growth streaming game. First came Hulu, a TV streaming platform co-owned by the major players. HBO got in the game too with an online offering as did the other premium cable channels. Soon, there were a ton of streaming platforms each with their own unique content.

Suddenly the slew of content that could be found on one or two services was split among a half dozen; each with their own monthly price. Netflix was quick to realize that their business model would have to change. Instead of licensing content, they started producing their own high quality stuff. However, this wasn’t cheap and Netflix’s price started to creep up bit by bit too.

Other companies joined the fray, even those not historically tied to TV. Amazon started spending a ton of money on content for their Amazon Prime Video service. Content wise, it was a golden era of television with awesome TV and decent pricing. Everyone wanted it on the game. Hell, even Apple recently announced their new product, TV+ with a yet to be announced price point.

However, the launch of Disney+ and the forthcoming TV+ poses a question. Are we at a point where streaming services are too split up to offer a good value proposition for the viewer?

Look at Disney. Disney+ is just one of a few offerings from Disney. First, there’s Disney+ which will have a lot of their family friendly IPs(Pixar) and some of their big movie franchises like Star Wars and Marvel. There will also be some family friendly TV shows like the Simpsons. Beyond that, there’ll be already existing Hulu which has most of their TV offerings from channels like Fox or ABC plus original content and some movies. Sports fans can also subscribe to ESPN+ which offers sports programming. That’s not to mention Hulu live TV which gives you access to live channels to replace your standard cable package for things that streaming doesn’t cover.

And that’s just Disney. There’s still Netflix which has a slew of great original content. Add to that HBO which probably sees the start of their biggest subscription quarter of the year this month due to the launch of Game of Thrones. Then there’s Amazon Prime Video, CBS all Access and various other streaming services.

You start adding all those up and suddenly, the price point isn’t so attractive. The question is whether this is actually any better than what we had before?

My answer is YES!

The streaming services are awesome and they’re the best thing to happen to TV in a long time. I think the launch of Disney+ just proves how attractive a value proposition this is for consumers.

One of the main complaints people had with cable television is how it forced you to choose packages that included things you didn’t want. This was good for TV channels and companies like Disney but bad for consumers. There was little choice and cable bills were difficult to control. Even basic packages cost way too much and gave little in terms of content.

Netflix changed all that but the reality is that Netflix was too good. It was impossible to go from a $120/month cable bill to a $9.99/month Netflix bill and expect that to last forever. As companies realized that streaming was the future; they split up into various streaming services that each had their own subscription fee.

This annoyed some people as the costs were increasing if you wanted to keep all the same content via multiple services. It had to happen. After all, it was unrealistic to expect that golden age of streaming to exist forever and content had to be separated much like channels.

HOWEVER, this is exactly what people wanted. The common complaint was the lack of elasticity when it came to cable TV. Now we had choice and the actual ability to build our own package, not the package that the cable companies wanted you to have.

That was the dream of television fifteen years ago and that dream is now reality.

As a viewer, I can go online and build a package of things I want to see and ignore the rest. I can easily control my television costs and best of all, I can cancel and renew them as needed. HBO is a perfect example of the latter. There’s no need to pay for HBO Now all year if I just want to watch one TV show(game of thrones). I can just renew it for one month, binge everything and cancel. The value proposition is fantastic and the choice is great.

Now, let’s get back to pricing as a whole. $6.99/month or $69.99/year is an amazing price for Disney+. It’s a price that shows what the streaming wars have done to aid consumer value.

In November, I’ll be able to get Disney+, Prime Video, Hulu(ad-free) and Netflix for $40/month. That’s an amazing amount of content for that price point. I know people who pay $120+/month for their cable package and I’d argue they get a lot less content than I do with this combined package. Plus no commercials! Sure, there’s a lack of sports but ESPN+ or one of the streaming packages can fill that void too. Even then, the price point will still be below what Comcast would charge you for standard television. Plus, now I can actually manage my bill well enough. For some, something like Disney+ may just be enough and $69.99/year for entertainment ain’t bad.

People will complain that we’re trending towards cable packages again but I don’t believe that’s the case.

The main complaint with cable was the lack of choice. Well, that’s exactly what we have now. We have choice and best of all, television content is probably the best it’s ever been. A lot of that is due to the deluge of streaming services. The competitive landscape has forced companies like Netflix, Disney, Amazon, AT&T and even Apple to spend money on new and better content. The amount of money being spent is insane and by far the most we’ve ever seen.

Product pricing is no longer packaged behind some veil of secrecy. This has forced companies to be aggressive and transparent with their pricing.

When I pay $120 for a cable package for three channels, I’m also paying for a bunch of content I don’t want. Now, I can pick and support what I want and cancel at any time too!

In fact, there’s a reason I know this is a good deal. It’s because Disney basically says they’re trying to buy membership right now by forgoing profitability until 2024. The best part about that is that their pricing strategy will only serve to push the competitive landscape of this product further down. It’s a situation where customers win; both from a content and price point perspective.

You can look at the financials of the various content producers. Whether it be Netflix, Amazon or Disney, the fact is that they’re not making a ton of money from streaming. Disney’s cash cow has always been ESPN and ABC but that’s changing now too as their transparent pricing is moving more and more people into streaming platforms. I don’t have a cable package anymore but I have a Hulu subscription which has been a money loser for the holders for years now. Bad for them but good for me.

Disney+’s aggressive pricing will only make that better.

Disney priced their product aggressively so what does that mean for Apple? Will they price high as is the Apple style or reconsider? How about Netflix? They’ve raised their prices but can they continue to do so now that Disney+ is almost half their cost?

Disney+ is going to deliver a boatload of content at $69.99/year, that’s less than half than some people pay for a month of cable. It is a great deal for customers. Better yet, it’s a good sign that streaming wars will continue to be a good deal for us going forward too.

It’s impossible to tell where the price points will go in the future. However, right now, the value propositions is world’s better than what cable offers. It’s a world of choice and flexibility. Disney+ shows me that won’t change anytime soon.

Now, let’s wait to see what Apple TV+ does because Disney+ certainly sets the tone for aggressive pricing. That only means good things for viewers like me.

One Comment

  • Wealthy Nickel

    Good insight. The $10 cable replacement wasn’t going to last forever unfortunately. But I agree with you that overall the direction is better for consumers if we get to pick which content we pay for.

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