Disney (DIS - Free Report) reported its fiscal third-quarter financial results Tuesday, but most of the entertainment giant’s conference call focused on its direct-to-consumer streaming plans to challenge Netflix (NFLX - Free Report) and Amazon (AMZN - Free Report) . So let’s dive into everything CEO Bob Iger said about Disney’s streaming TV platform that is set to launch in late 2019.
Iger said that Disney is set to “move full steam ahead” on its direct-to-consumer strategy and believes his company has the “brands and content to be extremely competitive and to thrive alongside Netflix, Amazon and anyone else in the market.” On top of that, Disney’s proposed $71.3 billion purchase of key Twenty-First Century Fox (FOXA - Free Report) assets has already been approved by shareholders and U.S. Justice Department authorities.
Disney’s Fox deal, which still needs clearance from several foreign jurisdictions, would see it own Fox’s film and television studios, as well as its stakes in Hulu, Sky PLC, Star India, and more. If Disney is able to complete its Fox acquisition the company would be able to roll out its streaming service with the rights to titles such as Avatar, The Fantastic Four, X-Men, The Simpsons, and more.
Iger stressed throughout the call that he thinks Disney’s brands are what will make its direct-to-consumer streaming services a hit when it is rolled out in late-2019. “We already have numerous original projects currently in various stages of development and production for this platform, including the world's first live-action Star Wars series and new episodes of the Star Wars: Clone Wars animated series,” Disney’s CEO said on the call.
“We're also moving forward with brand new Marvel content and, as I just noted, the Fox acquisition brings even more opportunity to create original programming for this platform.”
The company said that the “Disney app” will feature Pixar, Marvel, Disney, Lucasfilm, and eventually National Geographic. “We feel that it does not have to have anything close to the volume of what Netflix has because of the value of the brands and the specific value of the programs that will be included on it,” Iger said. Disney noted that the streaming service’s price point will reflect a lower volume, but did not get into any details about the exact price.
Disney will soon offer three stand-alone streaming apps: ESPN+, Hulu, and what Iger called “Disney Play.” Disney’s chief executive mentioned the possibility of a bundle pricing option for consumers that want all three. This all sounds good for Disney so far.
The only problem for Disney is that many of its movies are currently tied up in distribution deals with other companies, including Netflix. “The recent studio slate will not fully be available at any one time because of the existing deals,” Iger said. “But what we have been doing is making sure that since the time that we made the decision to bring the service out, we've not done anything that further encumbers any of our product.”
Disney seems as if it is negotiating to get some of its content back more quickly, but did stress that all of its movies from 2019 onward will be available on the streaming service. And in an effort to curb any concerns that all of its content won’t be available when it makes its debut, Iger pointed to the 2019 slate of movies that includes Captain Marvel, Avengers, Aladdin, Toy Story 4, The Lion King, Star Wars: Episode IX, and more.
All in all, Disney plans to offer a streaming service that features Disney, Pixar, Marvel, Lucasfilm, ABC content, as well as Fox brands and creative assets such as Searchlight, FX, and National Geographic. Therefore, it is not hard to imagine Disney’s streaming service competing in a crowded streaming market, which is set to see Apple (AAPL - Free Report) get in on the action as well.
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