We finally have the details on Disney's (NYSE:DIS) streaming offering, Disney+, and it seems pretty clear the House of Mouse is looking to shake up the streaming video.
Set to launch in mid-November, the service will feature tons of recent and classic Disney films, as well as series specifically built for the platform. If Disney's rich intellectual property library wasn't enough of a boost to the new service, Disney+ is debuting at $6.99 per month in the United States. -- making it far cheaper than comparable streaming services from the likes of Netflix (NASDAQ:NFLX) and Amazon (NASDAQ:AMZN).
In this video from our YouTube channel, we break down the major players in streaming video and talk about how their services play into each companies' overall strategy.
A full transcript follows the video.
Narrator: Hi, and welcome to The Motley Fool's Bottom Line series. In this video, we're going to take a look at Disney's new video streaming service, called Disney+, and how it stacks up against the established competitors.
Ever since Walt Disney's announcement of Disney+, fans and investors alike have been eagerly awaiting the latest entrant into the streaming wars.
Disney+ is scheduled to launch on Nov. 12, and the company expects to have more than 100 recent films and over 400 older movies available within the first year.
It's also developing 25 new series and movies that will be exclusive to the platform.
The Disney+ programming will come from across the company's Marvel, Pixar, Lucasfilm, and Disney brands, as well as contributions from Fox and National Geographic.
While creating an entirely new video streaming service is certainly a big move for Disney, how exactly does Disney+ stack up to its rivals?
One of the most important differentiating factors between Disney+ and its competitors is its price. Disney+ costs just $6.99 per month in the U.S., and if you pay annually, it's only a $69.99 per year.
The price includes four simultaneous streams, 4K video, ultra high definition (UHD), and high dynamic range (HDR) picture quality when available, all at no extra cost. And users also get unlimited video downloads.
To put this into context, Netflix's premium plan, which offers some similar features, costs $15.99 a month, far more than Disney+. And Disney+ is cheaper than Amazon Prime Video -- the second-largest streaming service in the U.S. -- which costs $8.99 per month.
In addition to its low cost, Disney will also offer a bundle of Disney+, ESPN+, and the ad-supported version of Hulu for just $12.99 in the U.S. Which will give viewers access to sports programming, the library of content from Disney, as well as original programming and broadcast shows from Hulu.
But just because Disney will have the best video streaming deal doesn't mean it'll easily topple Netflix and Amazon's dominance.
Netflix has 60 million paying subscribers in the U.S. and 91 million international subscribers. Meanwhile, Amazon's has more than 100 million Prime members in the U.S. that have access to the company's video streaming service.
Subscribers aside, both Amazon and Netflix have spent years -- and billions of dollars -- creating their own original video content. For Netflix, spending huge sums of money to produce and license content -- including $15 billion in 2019 -- is a matter of survival.
Netflix's entire business is built on video streaming, and it has to be the best at what it does in order to grow its top and bottom lines.
For Amazon, video streaming is more of a side business that provides value to its Prime members and keeps its customers engaged with the company.
While Disney has its theme parks, and its vast movie and TV empire, the company is betting that Disney+ will play an important role in controlling its own content, as well as forging direct relationships with its customers.
Disney's CEO Bob Iger recently said that "Disney+ marks a bold step forward in an exciting new era for our company...."
The bottom line is that Disney+ will likely be one of the most competitive video streaming services on the market. And even Netflix and Amazon will have a hard time matching Disney's stockpile of beloved characters and stories.
No other company has been as successful at turning storytelling into such a lucrative business as Disney -- which is why Disney+ competitors should be worried.