Disney+ Launches at $7/Mo: Our First Look

Taking the wraps off Disney+, Disney offers consumers a compelling, impressive lineup with popular favorites.

Image of Disney+ on tablet courtesy of Disney

Essentials about Disney+

launches Nov 12
$6.99/month
includes franchises Star Wars, Marvel, Pixar and Disney classic films
includes newer Disney films such as “Frozen”
includes favorites from Fox such as The Simpsons
includes National Geographic and Disney family-friendly TV programming
500 movies at launch, 7,500 episodes of television shows
25 original series
free of advertising

On April 11th, Disney CEO Bob Iger shared specifics about the entertainment company’s new online video streaming service, first announced back in November of last year, during an investor call. At the end of its two-hour and forty-five minute investor call to share details about Disney+. Disney’s new streaming service, Disney+ is priced at $6.99/month, which is roughly half of what consumers pay today for Netflix’s standard streaming package and also $2 less than Amazon Prime Video. Disney+ will launch on Nov 12. During the investor call, Disney CEO Bob Iger also briefly discussed bundling Disney+ with Hulu and ESPN but did not offer more details about timing or pricing.

“This is our first serious foray in this space and we want to reach as many people as possible.”

— Bob Iger, CEO at Disney

Disney+ Design and Features

Launching November 12 of this year, Disney+ or Disney Plus will be viewable on web browsers, smartphones, smart TVs, set-top multimedia boxes and tablets. The service works in a similar fashion to Netflix or Hulu. Disney+ highlights new content and special releases at the top of the home screen. You can explore Disney’s quality lineup ranging from Marvel and Star Wars to Pixar, National Geographic, Disney classics and new Disney movies in the works. The app recommends titles similar to Netflix or Amazon based on personal taste and has parental control features. Disney Plus will stream both HDR and 4K video.

While the app’s appearance is consistent across devices, there are some minor differences depending upon the platform. For example, audiences watching on smart TVs also can view animations. Disney allows for offline viewing and downloading content on to mobile devices for Disney+ subscribers.

Disney+ Content

Disney expects to showcase 500 movies that include 100 newer releases and 400 library titles of its iconic movies as well as 7,500 television shows. Disney+ expects to grow to 50 original series, 10,000 past TV episodes and 120 recent films within the next five years. As expected, the full library of content on Disney+ will be less than 20 percent of the content currently available on Netflix, according to a study by research firm Ampere Analysis. While Disney+’s streaming library is significantly smaller than Netflix’s collection, Disney+ boasts well known consumer favorite franchises and quality content. Disney+ reaps the benefits of Disney’s acquisitions of Marvel, Star Wars, Pixar and 21st Century Fox. Popular Disney classics such as “Snow White,” “101 Dalmatians” and “The Little Mermaid” as well as newer favorites such as “Captain Marvel,” “The Avengers: Endgame,” “Frozen 2”, “Toy Story 4” and “Star Wars: Episode IX — The Rise of Skywalker” will be exclusive to Disney+. “Captain Marvel” is the first movie in the Marvel Cinematic Universe that will not be available on Netflix.

Disney CEO Bob Iger shared that almost every single movie in the Disney catalog will eventually be available on the service, pulled out from its vault. While Netflix will continue to show existing Disney movies on its platform till the launch of Disney+, the streaming giant did announce that it was canceling the Daredevil TV series.

Disney+ will host the complete 30 seasons of “The Simpsons,” including all 662 episodes, as well as numerous family-friendly Fox programs. Disney acquired Fox back in 2017. Additional 20th Century Fox titles that will be on Disney+ include “The Sound of Music” and “Malcolm in the Middle.” Less family-friendly content from Fox is expected to go to Hulu, a company in which Disney owns a 60 percent stake. Disney+ will contain the entire Star Wars franchise as well as 18 Pixar movies at launch and Pixar’s animated shorts. Disney is also developing new series such as Monsters Inc. with Pixar and Star Wars television shows.

While Disney did not announce new Star Wars or Marvel projects during its Disney+ investor presentation, the company shared a quick preview of John Favreau’s highly anticipated Star Wars TV series, “The Mandolarian.” Favreau’s take on the popular Star Wars franchise is set seven years after the Battle of Endor in Return of the Jedi. The story follows “a lone gunfighter in the outer reaches of the galaxy far from the authority of the New Republic.” Additional Star Wars spinoffs include a live-action series with Diego Luna as Cassian Andor and a seventh season of Star Wars: The Clone Wars series.

Kevin Feige at Marvel Studios also shared that Tom Hiddleston will reappear as Loki in the new “Loki” series. Feige confirmed that Disney+ will be integrated with future feature films at Marvel and will add documentaries behind the scenes such as “Marvel 616” and “Marvel Heroes Project” TV shows.

Disney+ is also developing two new shows “Magic of the Animal Kingdom” and “The World According to Jeff Goldblum” for National Geographic, in addition to over 250 hours of existing National Geographic content. Additional Disney channel programming such as live-action kid movies, “Hannah Montana,” and “High School Musical: The Musical: The Series” will also be available on Disney+.

Additional series that are rumored to be in development for Disney+ include:

an untitled Muppet series
3 Men and a Baby
Don Quixote
Father of the Bride
Flora & Ulysses
Lady and the Tramp
Magic Camp
Noelle
The Paper Magician
The Parent Trap
The Sandlot
Stargirl
The Sword in the Stone
Timmy Failure
Togo
Honey, I Shrunk the Kids.

Ten Unscripted Series in the Works

In April, a report surfaced that Disney+ would also include ten unscripted series of the following projects listed below.

Marvel’s 616: a documentary about Marvel’s stories, characters and creators

Earthkeepers: a documentary about the people such as conservationists who are changing how we see animals.

Be Our Chef: a Disney-inspired cooking competition hosted by Angela Kinsey of The Office.

Cinema Relics: an anthology of film props, art and costumes.

Encore: a recreation of original performances from former members of a high school musical with The Good Place actress Kristen Bell as producer.

Marvel’s Hero Project: a documentary about inspiring kids who have demonstrated selfless acts of bravery and kindness.

(Re)Connect: a story about a family that breaks apart and the issues that drive families apart and how to resolve them.

Rogue Trip: a travelogue of places that most tourists would not dare to venture by Bob Woodruff and his 27-year old doppelgänger son, Mack.

Shop Class: a competitive series about inventive students tasked who design, build and test new contraptions.

Untitled Walt Disney Imagineering documentary series: a documentary about the people, craft and business behind Disney’s theme park magic.

Non-Disney content: content from National Geographic and 21st Century Fox’s magazine and affiliate TV businesses.

Audiences can also choose to fork out $69.99 for a full year subscription, saving $13.89. Whether consumers sign for the monthly or annual subscription, they can enjoy access to the full library that includes originals such as “Dumbo” and “Bambi” to Pixar’s “Finding Dory,” the full Star Wars collection and the 21 films currently on video from the Marvel Cinematic Universe. Marvel’s recent billion-dollar blockbuster, “Captain Marvel,” along with Marvel’s upcoming release “Avengers: Endgame” will stream exclusively on the new platform. “Frozen II,” the sequel to the 2013 musical fantasy that garnered $400.7 million nationwide, will launch in theaters November 22. After the movie completes its multiplex run, it will be available for streaming on Disney+ right after its theatrical window expires.

Disney+ Devices

Disney+ will be available on smart TVs, web browsers, smartphones, tablets, TV boxes and game consoles like the Nintendo Switch. The company is working on launching its app on the PlayStation 4 and on Roku devices to be easily accessible to consumers everywhere.

Disney+ Availability

Image from Disney’s classic “Dumbo” (1941) via Disney

When Disney+ launches on November 12, 2019, the platform will be accessible throughout North America. Western Europe and the Asia-Pacific market will have access by Q2 of 2020 and Disney+ will roll out to all major markets within two years as Disney builds out deals with its partners around the world. Disney is also planning to create new content for the platform for $2.5 billion and to easily move over films after their theatrical releases direct to streaming. New TV series in the works include the live-action Star Wars series “The Mandalorian,” directed by Jon Favreau, known for directing the first Iron Man (2008) as well as the Marvel series “The Falcon and the Winter Soldier.”

Kathleen Kennedy and Jon Favreau at Disney+ investor presentation. Image via Disney

“Since we’re starting with new characters in a new time period, it’s a great way to bring in new fans.”

— Jon Favreau, Executive Producer of "The Mandalorian"

Favreau shared clips from the new series at the investor presentation. “Mandalorian” will consist of eight episodes. He is also the director of Disney’s live-action “Lion King” reboot, arriving in theaters July 19.

Disney expects to have 60-90 million new subscribers via Disney+ by 2024 with 30 percent coming from domestic markets, according to Morgan Stanley analyst Ben Swinburne in an April 8 note to investors. Disney+ is expected to have 5 million paying subscribers by the end of 2020. To build awareness about Disney+, Disney is launching a large marketing campaign across its properties such as Disney theme parks and important events such as Comic-Con. Through Disney’s TV networks (ESPN, ABC, Disney Channel and more) can connect to more than 100 million consumer households.

“[The company is set to unleash a] “synergy campaign of a magnitude that is unprecedented in the history of Disney.”

— Ricky Strauss, President of Content and Marketing for Disney+

During the investor call, Disney CEO Bob Iger, who is responsible for Disney’s largest acquisitions such as Pixar Animation, Marvel Studios, Lucasfilm Ltd. and the entertainment assets of 21st Century Fox since becoming CEO in 2005, said that he will be stepping down from his contract at the end of 2021. Disney is in the process of finding a suitable replacement. Iger’s remarkable success as CEO took the entertainment company (DIS) from $23 a share to $130 a share when Disney+ was announced.

Wall Street responded well to Iger’s presentation of Disney+, its new streaming-video service. Netflix (NFLX) shares fell almost five percent on Thursday.

Spotify Buys Gimlet Media and Anchor - Two of the Largest Acquisitions in Podcast History

The Swedish audio streaming company cemented its presence in the podcasting world by its purchase of Gimlet Media, the content creators for Startup and ReplyAll podcasts, and Anchor, the production and distribution platform

Spotify’s acquisitions came as a surprise to the industry as Spotify has never bought a company focused on creating content such as Gimlet Media nor has it previously expressed interest in the podcast space. Podcasting has however been attracting increasing investment from advertisers, raking in over $314 million in 2017 in the U.S. alone. Spotify’s purchase of Gimlet Media at $230 million, the content creators behind the Startup and ReplyAll podcasts, is the largest acquisition in podcast history. Spotify’s second purchase of Anchor, the production and distribution platform for podcast creators, was for an undisclosed sum. Spotify’s announcement signals the company’s keen interest in the podcast market. Spotify has also shared that the company intends to invest up to $500 million this year alone in the podcasting space.

Spotify has dominated the audio streaming industry, reporting 96 million subscribers and posting its first profit this past quarter of $107 million (€94 million), less than one year after the Stockholm-based company launched its IPO on the NYSE on April 3, 2018.

“For the first time in company history, operating income, net income, and free cash flow were all positive.”

— Spotify, Q4 Shareholder Letter

Spotify has been the industry giant for a long time in terms of subscriber loyalty, although Apple Music has been playing catch up. Apple announced that it had reached 56 million subscribers this past November. Apple has been closing the gap, though Spotify still dominates the market comfortably with a 40 million lead. Nonetheless, the Cupertino giant has three advantages - offering bundling options, thus achieving a conversion rate of 0.64% (as compared to Spotify’s stable 0.24%), paying artists a higher percentage than Spotify and not needing streaming to be profitable.

The two companies have also vastly different approaches to playlists - Spotify’s playlists are driven by algorithms, while Apple’s have what CEO Tim Cook calls “the human touch.” Nonetheless, consumers, by a large majority, have preferred Spotify’s playlists.

Cook insists that playlists generated by computers are lacking. In an interview with Fast Company, Cook explained that a streaming music platform has the potential to offer a sublime music experience.

“Music inspires, it motivates. It’s also the thing at night that helps quiet me. I think it’s better than any medicine.”

— Tim Cook, Apple CEO

In an interview last year with Fast Company, Spotify’s CEO Daniel Ek said that he was confident that the company’s computer-generated playlists, which he calls the company’s “key differentiator” will “defy all the skeptics” in the long run.

“Music is everything we do all day, all night, and that clarity is the difference between the average and the really, really good.”

— Daniel Ek, Spotify CEO

Arguably, Spotify has already won with this strategy, given the popularity of the platform’s playlists. Even its most vocal critics such as Taylor Swift and Jay-Z have returned to Spotify and uploaded their music once again to its platform.

Why Podcasts?

The word “podcast” is literally derived from the iPod. Apple redesigned the Podcasts app and offered more in-depth analytics in 2017. Spotify did not actually consider podcasts a good investment initially given the “poor user experience” as Chief R&D Officer Gustav Söderström said in an interview with TechCrunch.

“The user experience was really poor. There was no 15-second skip. In spite of that, we saw a lot of users listening to podcasts. It was kind of unexpected, and we didn’t really understand why. It turned out people really wanted to have podcasts in Spotify with their music. If you look at radio, it’s not that surprising.”

— Gustav Söderström, Spotify's Chief R&D Officer

However, podcasting’s striking similarity to radio makes it compelling for the company. Spotify CEO Daniel Ek recognized this.

“...people still spend over two hours a day listening to radio—and we want to bring that radio listening to Spotify, where we can deepen engagement and create value in new ways.”

— Daniel Ek, Spotify CEO

Spotify aims to create an avenue where consumers can discover new audio and play it. This includes popular podcasts such as the ones created by Gimlet Media and also producing its own original content using Anchor. Thus Spotify would offer a mix of radio and Netflix-like original content. Now if Spotify can successfully achieve this, the company would become the de facto platform for consumers to discover and produce original audio, thereby attracting and retaining both listeners and creators.

Gimlet Media is a podcast studio with $28.5 million funding, based in New York that is known for its original podcasts such as “Homecoming,” which has now been adapted from a podcast to video for Amazon Prime and for “Reply All” about Internet culture.. Anchor is a podcasting startup that helps anyone record their audio on the go and distribute that audio right from an app on their smartphone or tablet. Anchor raised $15 million in funding, of which $10 million came from GV, Alphabet’s investment branch. After a redesign of their platform last year, Anchor has enabled podcasters to distribute their recordings straight to Spotify, along with other streaming services. Apparently, Anchor has enabled the production of 15 billion hours of content listening on Spotify just in the fourth quarter of 2018 alone.

Spotify’s two large acquisitions - original podcasts and assisting podcasters in creating and launching their podcasts, signal the company’s strong interest in the podcasting world. The ‘Netflix’ model of creating and locking down original content would help in the company’s bottom line instead of having to negotiate royalties and deals with labels. Gimlet Media brings Spotify talent, technology and proven popular podcast models for original content, while Anchor provides hosting and monetization methods. Spotify’s CEO Daniel Elk shared his company’s goals in a press release.

“These acquisitions will meaningfully accelerate our path to becoming the world’s leading audio platform, give users around the world access to the best podcast content, and improve the quality of our listening experience, as well as enhance the Spotify brand.”

— Daniel Ek, Spotify CEO

In 2018, an Edison Research Infinite Dial report on podcast listening trends shared that 26 percent of people in the U.S. listen to at least one podcast each month and that listeners tune into seven podcasts a week on average. Spotify’s CEO Daniel Ek shared in the public announcement of the two acquisitions, that his company would apply “better discovery, data, and monetization to creators.”

“These companies are best-in-class and together we will offer differentiated and original content. Gimlet and Anchor will position us to become the leading platform for podcast creators around the world and the leading producer of podcasts.”

— Daniel Ek, Spotify CEO

Spotify is clear on its ambitions to be the world’s largest and most popular audio streaming company for both music and non-music audiences. The company intends to spend up to $500 million for similar acquisitions in 2019, as shared in its Q4 shareholder letter.

“Based on radio industry data, we believe it is a safe assumption that, over time, more than 20 percent of all Spotify listening will be non-music content.”

— Daniel Ek, Spotify CEO

Podcasting Attracts Strong Investments

Podcasting has been attracting strong investments in recent years. Betaworks Ventures, an early venture capital firm, invested in both Gimlet Media in 2014 and Anchor in 2015. Betaworks Ventures partner Matt Hartman explained in a blog post why he considered podcasting a lucrative investment.

“We saw early data around podcasts having a bit of a resurgence before Serial (a popular podcast) launched. That data, combined with the increasing battery life of iPhones and an increasing amount of connected cars on the road, led us to think there was an opportunity for internet-powered audio. This, combined with the quick growth of smart speakers, solidified our conviction that people would consume more and more audio content.”

— Matt Hartman, BetaWorks Ventures Partner

In 2015, Scripps media company bought Midroll Media, the digital media company in Los Angeles known for its original podcasting and ad network. Midroll also acquired Stitcher, the popular audio hosting platform. Last year in the fall, iHeartMedia purchased Stuff Media, a podcast content company. Apple reportedly was in talks to purchase iHeartMedia in December.

These acquisitions reveal that the demand for podcasting is only growing. With Spotify’s two acquisitions, the company now has a complete podcasting solution from discovery to creation, distribution and monetization. This bold move demonstrates the company’s ambition to become the world’s most popular audio platform from music to on-demand audio for listeners, podcasters and advertisers.

In its Q4 shareholder letter, Spotify revealed that it was ready to spend up to $500 million for similar podcasting M&A activity in 2019.

“Growing podcast listening on Spotify is an important strategy for driving top of funnel growth, increased user engagement, lower churn, faster revenue growth, and higher margins.

We intend to lean into this strategy in 2019, both to acquire exclusive content and to increase investment in the production of content in-house. The more successful we are, the more we’ll lean into the strategy to accelerate our growth, in which case we would update guidance accordingly.”

— Spotify, Q4 Shareholder Letter

Spotify, without a doubt, has some serious podcasting ambitions.