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Worryingly so. To my mind, the price looks intended to kill off other independent services, especially netflix. I can't see these deals lasting at all, but even
by ricree 7y ago
Worryingly so. To my mind, the price looks intended to kill off other independent services, especially netflix. I can't see these deals lasting at all, but even three or four years could be enough to cripple Netflix so long as they are generous with their back catalogue and new releases.
- anaphor 7y agoWon't they just jack up the price each year like Netflix has been doing, in order to recover their original investment?
- adventured 7y agoI would expect Disney to be willing to operate at a loss for years on Disney+, in order to catch up some on subscribers. Investors will want to see sales & subscriber growth more than profit at this point, from that service. They're not expecting profit anytime soon. A failure on gaining subscribers will be a big hit to the stock however, it'll indicate a permanent subservience to Netflix in streaming. If they generate large subscriber gains, the market will reward them for it considerably and forward bet on eventual profits. Disney has $13.x billion in operating income, they can easily afford to try to tip over Netflix's money burning machine and try to hurt them financially. The $12.99 figure puts a further cap on the pricing power that Netflix has at this point, which is also a cap on their ability to fix their severe cash burn problem. Disney can play a long game and watch Netflix continue to drown in debt interest costs.
- skinnymuch 7y agoI think Disney themselves have said they want to incur heavy losses for 2-4 years on streaming. Key word “heavy”.
- Pfhreak 7y agoThis seems factually wrong. I haven't checked the data, but Netflix has been streaming for like a decade, and while they've increased the price from time to time it's hardly been annually. I think what I've paid has gone from $8 to $13 in 10 years?
- Dylan16807 7y agoOkay, so every other year. Inflation would have gone from $8 to $9.50. And they've lost a lot of content.
- skinnymuch 7y agoThey’ve also added a lot of content. Netflix of 2010 or 2011 didn’t have a ton of streaming available.
- majormajor 7y agoHulu brings in a ton of ad money already, if this is an ad-supported bundle for all of it, they probably have way more pricing flexibility than Netflix.