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Walt Disney (NYSE: DIS) plans to launch its over-the-top streaming service in November. The company plans to charge $ 6.99 per month – about half the price Netflix (NASDAQ: NFLX) charges. The service will be launched with Star wars and Marvel content with a ton of classic Disney material. It will also have a huge archive of Disney-owned content. But even though it has 70 million subscribers, it will still generate only less than 10% of the company 's total business figure.
To watch full episodes of all The Motley Fool free podcasts, visit our podcast center. A full transcript follows the video.
This video was recorded on April 16, 2019.
Dylan Lewis: We are talking about Disney in this second segment here, Dan. This is a recording of a conversation we had in January. We finally have some details on the Disney + offer that many people were waiting for.
Dan Kline: I am so excited about it!
Lewis: You are personally excited.
Kline: In this show, we discussed with you, and many other hosts, the number of streaming services I have. The answer is pretty much all except that, for example, I do not have the MLB package and things like that. But I have about 13 or 14 different streaming services, partly for my work, partly because I am not good with money in certain situations.
Lewis: You like that, right?
Kline: Yes, and I look at a lot of things. I was armed against Disney +. There was a part of me going, "Okay, I'm a big Star wars fan, but that's only two Star wars shows. I like all Marvel movies … wait a minute, there will be six Marvel shows? "The content offer if you're a family is a great Disney, everything that ends up becoming Disney, once the rights are clarified." New Marvel shows, new Pixar content, really, something for everyone, all Fox content. The simpsons& # 39; new house will be Disney +. And they charge $ 6.99 per month, which is about half the price of Netflix.
Lewis: Yes, I think it's a master shot. I have to give you and me a little credit here. When we talked about it early in 2019, we said, "I'm expecting it to go up to about $ 7 or $ 8 a month." Looks like we have that right.
I think if you want to have multiple streaming subscriptions to pay $ 11 or $ 12 a month, maybe $ 13 a month for Netflix, then be able to use them and only pay around $ 20, that sounds pretty reasonable.
Kline: They will take part in Hulu, which is their product, which is interesting. They will remedy this by offering you Hulu Live, Disney +, ESPN +, at a fixed price. They did not specify the price of this package. But they acknowledged that they had the intention to do it.
Lewis: When will it really start, Dan? When will people be able to start using it?
Kline: Oh, you have to ask that? November?
Lewis: I think by the beginning of autumn, maybe November 12, something like that.
Kline: It seems right. It's going to be a blockbuster launch. They are not deployed with all this content at once. But honestly, they will launch with The mandalorianwho is the Jon Favreau Star Wars Show. That alone could have led me to buy the first two months. And if you're a movie fan, they'll finally have all the Avengers movies, all Pixar movies. It's a huge wealth of content. We said this on the other show. Only they can do it. Nobody else could launch an immediate competitor of Netflix.
Lewis: Yes, and the price is smart. I think what people have to keep in mind with this, is that the stock has gone up 10% after announcing these details during the investor day. It's a record for Disney, which is great because as a Disney shareholder, I've been watching it for a while and I thought, "There's something wonderful here, but we have been swimming for a long time and there have not been any big wins. "Even with this good news, even with this pop stock, it will not immediately change the books for Disney.
Kline: No, it's a huge investment. They are predicting 60 to 90 million subscribers by 2025. This is a huge number. You must assume that the price will increase because all others will go up. Probably every time Netflix raises a dollar, Disney will increase $ 0.75.
Lewis: We are approaching an annual pace on this subject.
Kline: Yeah. At some point, I think that there will be a loss of value. Maybe it's $ 15, maybe $ 19. I do not know what is the number. But we talked about it, you can turn off Netflix. Right now, you lose some of your saved stuff. But you could be like, "I'm just going to watch Disney for the next three months." And some people get bothered to watch TV this way. I tend to be more, I look traditional, episodically. I do not want to watch four episodes of the same series at night. This method may not work for me. But for your generation, who has the habit of stuffing themselves, I think Netflix will push people to say: I will close my account for three months.
Lewis: I know that some people rotate continuously. They have one for three or four months of the year. Then they rock and have another for two months. They do it like A, B, C, D, rinse, repeat so that they can watch all the shows that are new on the platform. I am not one of those people. But I also have only a Netflix subscription. Maybe that's part of it.
Kline: It's something I feel I should do. And whenever I think about it, I am in a household of three people, I have a wife and a child. So I'll say, "I do not watch Netflix this month," but my wife will have eight episodes in something. So it does not always work. But with a little planning, I think prices will go up.
Lewis: Yeah, it 's a little harder to do that when there are so many speakers. As a person who is just making these subscription decisions, a little simpler.
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