Disney's streaming service could pose threat to Netflix

The Walt Disney Company has announced its new entertainment streaming service “Disney+” will launch on November 12. 

Disney+ will offer a bundled streaming service, packaged with ESPN+ and the advertisement-supported tier of Hulu.“ The bundled service, priced at $12.99 per month, is the same price of the most popular streaming option offered by Netflix.  

Ad-supported Hulu now costs $6 (consumers can pay more for ad-free Hulu), and ESPN+ costs $5. The upcoming Disney+ standalone service will cost about $7. So the package will represent a $5 savings. 

"They’ve created content and bundled these services around an entire family, from dad to mom to the kids,” said Dr. Mark Johnston, Professor of Business, with the Rollins College Crummer Graduate School of Business.

Johnston says Disney is offering content to attract all audiences.

“You look at Disney and you look at all the content they have accumulated over the years and their recent acquisitions with Marvel and Lucas Films and the success of that content, they are well positioned to come into the market immediately with a lot of great stuff,” said Johnston.

Johnston believes by offering its services at the same price as Netflix, Disney is out to steal subscribers. He feels Netflix will need to lower prices and add content to keep them.

“It puts immediate pressure with their pricing but I think equally or even more important in the long-term is Netflix focus on original content because people are going to need a reason to stay with Netflix,” said Johnston.

Netflix subscribers we spoke to welcome the idea of cheaper prices.

“With the Netflix prices going up, competition is always good,” said Ashley Kenn, Netflix subscriber.