Marketing of the Disney Plus direct-to-consumer streaming service debuting in November will “start to hit” later in August, said CEO Bob Iger on Disney’s Q3 earnings call Tuesday (see 1908060069). “I'm actually going through a comprehensive marketing plan with the team next week,” he said. “Comprehensive probably is an understatement. It is going to be treated as the most important product that the company has launched in, I don't know, certainly during my tenure in the job, which is quite a long time.” Iger succeeded Michael Eisner as CEO in 2005. Iger wants Disney Plus to launch with better than 90 percent consumer awareness, he told Disney’s Investor Day conference in April. “You will see marketing both in traditional and nontraditional directions,” and on all “the touch points that the company has, whether it's people staying in our hotels, people that have our co-branded credit card, people who are members of D23,” Disney’s fan club, he said. “The opportunities are tremendous to market this, and I feel good about some of the creative that I've already seen.”
With U.S. consumers unlikely to subscribe to more than three streaming services, the 20 million to 30 million over-the-top subscribers Disney hopes to have by 2024 will likely mostly come from Netflix's 60 million U.S. subscribers, Needham analyst Laura Martin wrote investors Wednesday. Disney "will win" and Netflix "lose" the U.S. subscriber battle because of the lower price of the Disney Plus streaming service, its Disney content, lower customer acquisition costs, balance sheet and multiple content creation studios, Needham said. It said direct-to-consumer investments in technology, content and marketing required to launch OTT services will hurt Disney for several financial quarters. Netflix didn't comment.
Disney plans to bundle streaming services Disney Plus, ESPN Plus and the ad-supported Hulu tier for $12.99 a month, starting in November, CEO Bob Iger said Tuesday during the company's Q3 earnings call with analysts. For Q3, Disney had revenue of $20.25 billion, up 33 percent. The results were the first full quarter since Disney closed on 21st Century Fox in March. Chief Financial Officer Christine McCarthy said a couple of Fox businesses underperformed, with Fox film results down due to X-Men: Dark Phoenix doing worse than expected. There also was an operating loss at Star, due largely to higher rights costs for sporting events, she said. Disney expects about $900 million in operating losses in Q4 in its direct-to-consumer business due to investment in ESPN Plus and Disney Plus and taking operational control of Hulu, McCarthy said. Iger said given the Fox films already in the pipeline, it could be a year or two before Disney starts putting its own thumbprint on that part of the business. Asked about a possible international rollout of Hulu, Iger said that it's being pursued. He said Disney Plus would launch with close to 300 films, ramping up to 400 relatively quickly, plus 7,500 episodes of Disney TV.
Amazon Prime Student members can get the company's Music Unlimited for $0.99, said Amazon Tuesday. Existing Prime Student members can add the offer to their monthly or annual Prime Student membership plan; college students who haven’t tried the service yet can sign up for a six-month free trial at amazon.com/primestudent, it said. The announcement comes after Spotify management last week attributed lower-than-expected Q2 subscriber adds to a marketing miss for its student-targeted service (see 1907310054). Chief Financial Officer Barry McCarthy pegged the shortfall at less than 1 million, attributing it to lack of awareness about the company’s lower cost student subscription program that had “no awareness at all.” Spotify’s Premium Student subscription is $4.99 per month for the trio of Spotify's on-demand music service, Showtime and Hulu.
The global pay-TV subscriber base is expected to top 1.1 billion by 2024, ABI Research said Tuesday. That's despite competition from streaming services, which resulted in North American cable, satellite and IP TV services losing more than 1.2 million subscribers in Q1, adding that home broadband adoption rates have increased, but traditional pay-TV services dominate emerging markets. It said some pay-TV operators have launched their own, lower-cost livestreaming services or deployed Android-based set-top boxes to integrate streaming and pay-TV services.
Beginning Tuesday, AT&T Wireless Unlimited & More Premium customers can choose a Spotify Premium subscription from one of seven entertainment options, for no extra charge, said the companies Monday. Other select AT&T customers can sign up for a six-month free trial of the Premium music streaming service in the beginning of an “ongoing collaboration" between the two companies, they said. It’s the latest pairing of streaming content companies and mobile operators, as smartphone upgrades have stretched out: Verizon and Google announced a partnership in April (see 1904230059) for free access to YouTube TV, and in January, Verizon announced a free Apple Music account for customers in its top two subscriber tiers (see 1901160010).
Average revenue per user for standalone pay-TV service declined 10 percent from 2016 to 2018 to $76, blogged Parks Associates Thursday. Consumers’ self-reported spend on non-pay-TV home video entertainment dropped 30 percent per month over the past seven years to just over $20 at the end of 2018, after peaking at nearly $40 in 2014, Parks said. Spending on packaged video media has steadily declined since 2012; movie theater spending fell by 50 percent from 2014 to 2018, it said, while spending on internet video is the only category to hold steady since 2014 at $8-$9 per month. With subscription online video the only growth category for consumer-paid video entertainment beyond pay TV, operators are taking different approaches to leverage the trend, said analyst Brett Sappington. Comcast and Dish are offering subscriptions to third-party over-the-top video services and integrating them into their interfaces to serve as content aggregators; others, including AT&T and Dish, are expanding their online reach, introducing virtual MVPD services, Sappington said. Twenty percent of U.S. broadband households don’t have pay-TV service, said Parks.
Livestreaming video continues to be the fastest-growing category of internet video bandwidth use, and will stay that way at least through 2022, with virtual MVPDs, eSports and traditional sports driving demand, blogged nScreenMedia analyst Colin Dixon Tuesday. He said virtual MVPDs have a subscriber base of close to 9 million, with viewing times similar to those of traditional TV. More sports are delivering live games online, while major sports are beginning to license games to online providers like ESPN Plus and Dazn, he said.
VidAngel and studios are locking horns over a proposed permanent injunction following the $62.4 million court award in the copyright violation complaint against it (see 1906180003), VidAngel, in an opposition filed last week (docket 16-cv-04109, in Pacer) with the U.S. District Court in Los Angeles, said a permanent injunction's not necessary since it ended its disc-based service more than two years ago and won't use it again "absent an act of Congress or express authorization from a higher court." It said what the content companies really want is "a broad injunction to wield the threat of contempt sanctions over VidAngel for any future conduct that implicates copyright in any way -- including lawful conduct." It said the actual target is its current filtering service, which filters streaming content. Plaintiffs Disney and Warner Bros. in the injunction motion (in Pacer) filed earlier this month said even if VidAngel could pay the $62.4 million court award, those money damages wouldn't be enough "to stop VidAngel’s demonstrated intent to violate Plaintiffs’ rights." They said VidAngel's streaming without a license is harming their exclusive right to control distribution of their works.
NBCUniversal's streaming service is aiming for April launch, with The Office -- which generates 5 percent of Netflix's traffic but that Netflix is losing -- a tentpole for the platform, NBCU CEO Stephen Burke said Thursday as Comcast announced Q2 results. He said the service will have some original programming, but NBCU expects the "vast majority" of its viewership to come for its acquired rather than original content. Comcast said it had revenue of $26.9 billion, up 24 percent over last year. It had 25.6 million residential broadband customers, up 1.2 million. CEO Brian Roberts said it's on pace for a 14th consecutive year of adding more than a million net broadband subscribers, while in Europe, Sky added 304,000. Comcast has 20.6 million residential video customers, down 432,000; 10 million residential voice customers, down 205,000; and 1.6 million wireless lines, up 805,000. Asked about possible deals, Roberts said the cable operator is focused on its current properties, with the Sky deal being opportunistic.