Walt Disney Co. Chief Executive Officer Bob Iger gave investors a big download Thursday, November, 9, on what’s in store for the company’s new video streaming service.
Iger said the new subscription service will debut in the second half of 2019 and be priced “substantially below” Netflix Inc., which costs about $11 a month. It will feature Disney, Pixar, Marvel and “Star Wars” films several months after their release in theaters.
Disney’s studio will produce four or five films a year exclusively for the new service. There will also be a number of original TV shows. Some already in production are based on Pixar’s “Monsters Inc.,” the Disney Channel’s “High School Musical” and Marvel superheroes. Customers will also be able to access thousands of hours of programming from Disney’s film and TV library. The company also plans an ESPN-branded streaming service in 2018.
All this doesn’t come cheap. On a call with investors, Chief Financial Officer Christine McCarthy said investments in BamTech, the company’s video streaming platform, will crimp operating income by $130 million in fiscal 2018. Disney also expects losses on its investment in the Hulu streaming service to increase by more than $100 million.
The new Disney service, which hasn’t been named, won’t feature traditional advertising, but may include sponsors much like the Disney Channel. Parents also will be able to block content that may be not be suitable for little kids. There won’t be R-rated movies, Iger said.
For pricing, Disney watchers should probably look to the company’s DisneyLife streaming service, which launched in the U.K. two years ago. Initially priced at 10 pounds ($13.14) a month, it now costs half that.
“It is our goal to attract as many subs as possible starting out,” Iger said.