Netflix vs Disney+: Bundle Price Same As Netflix Standard But With More Content

There is a big curiosity to know who will win the Netflix dominated video-streaming price war as some packages are out and new players are readying to get in.

The upcoming entry of top-notch media players such as Disney, Apple, and AT&T is keenly watched as they are eyeing the top slot occupied by entrenched leader Netflix.

While Disney+ will be launched on November 2019, Apple TV+, AT&T. Comcast and NBC will roll out next year.

The core of Netflix news has been its strength in the original series including “Stranger Things” that keeps winning subscribers despite looming competition from new players.

Aiming the market leader slot, Disney has made some smart moves recently. One wild card was the Disney streaming service price. The $12.99 package announced on Tuesday during the earnings report made some hard Walt Disney news in the media.

Disney’s get three at the price of two

In terms of cost, Disney’s Disney+, Hulu and ESPN+ at $12.99 per month may be the same as Netflix’s standard plan.

In the Disney combo, individually, Disney+ is $6.99 a month and Hulu just $5.99 a month. But the bonus is a free ESPN+ subscription.

Disney is lining up its offerings from Nov. 12, showcasing a seductive content line up of Marvel superheroes, “Star Wars” creations, Pixar characters, TV series plus Disney movies.

That is why some analysts are ready to place a big bet on Walt Disney Co.

Disney CEO Bob Iger is also bullish on Disney’s content edge thanks to in-house properties including Star Wars, Marvel and assets from 21st Century Fox.

“We think we’re uniquely positioned because of the content, because of the brands,” Iger said.

Analysts see more depth in Disney’s content

Analyst Laura Martin of Needham places big bets on the pricing of the Disney+ service ($6.99 a month) and the bundled package of Disney+, ESPN+, and Hulu for $12.99 a month.

“We project Disney will win and Netflix loses the U.S. SVOD (subscription video on demand) battle,” Martin wrote in a Wednesday note.

The analyst estimates that Disney’s projected 20 million to 30 million U.S. subscriptions by 2024 will mostly come from Netflix’s 60 million U.S. subscriptions.

Disney’s goals include 60 million to 90 million worldwide subscriptions by fiscal 2024. Analysts like Benjamin Swinburne of Morgan Stanley are “incrementally bullish” on Disney. They hope Disney will hit the numbers in 2020, using the $12.99 bundle.

How Disney pricing can undercut rivals

Netflix with its 151 million global subscribers will not be that vulnerable to expect faster evaporation of subscribers as consumers keep multiple services. However, Disney’s pricing will curb the Netflix strategy of price hikes based on periodic subscriber consolidation.

Netflix costs just one-eighth against a traditional pay-TV subscription, which runs $100 per month. So price hikes did not rattle much.

But Disney Vs Netflix direct streaming competition will make the former’s future price hikes hard as it will repel consumers to the rival player's camp. The strategies of Apple TV will also be vital to other players.

Netflix raised prices last quarter and faced the market rebuff even before the competition shaped up and its shares fell 10 percent in July.

Netflix’s valuation matters in the price war

As far as Netflix is concerned, after content such as “Friends” and “The Office” gets rolled off, it is expected that some of the value pull Vis a Vis other service players will wane.

Customers may not desert Netflix so fast but its flexibility to raise prices to keep valuation high relative to earnings will come under pressure. A falling valuation will be the real Netflix killer.

Meanwhile, Disney CEO Bob Iger commented on the coincidence of Disney’s three-piece bundle at $12.99 per month as that of Netflix's standard plan.

“I know there’s a lot that’s been speculated about us going after them,” Iger told CNBC and added that the fact is “we’re not, we’re looking to occupy space.”

Netflix stock was up 3.82 percent on Thursday’s trading.