4 ms·

If they all follow Disney's pricing model, that would work, but everyone wants too big a slice of the pie.

by mrkstu 7y ago

bryanlarsen 7y ago
Disney has admitted that they will lose money at their current price level. Which implies strongly that they'll be increasing prices substantially in the future.
- yodon 7y ago
  Disney has lots of ways to monetize. A slight increase in the odds your family books a Disney Cruise is a significant real monetization channel that doesn't show up in subscription pricing. Matthew Ball has a good analysis of these models[0]. [0]https://redef.com/original/nine-reasons-why-disney-will-succeed-and-why-four-criticisms-are-overhyped https://redef.com/original/nine-reasons-why-disney-will-succ...
- megablast 7y ago
  They admitted they will lose money for the first few years, not forever. Like almost every single product. Do you think the iPhone or Xbox made a profit in the first few years, when you count the money spent on research and factories?
- kevin_thibedeau 7y ago
  How do you lose money on content you already own? This is just Hollywood accounting in effect.
  - TulliusCicero 7y ago
    There's a cost to providing the service in terms terms of bandwidth, servers, and development staff. There's also a cost to the new, original content they're putting on there, like the Mandalorian.
  - arthens 7y ago
    Disney is currently making bank by licensing their catalogue to various streaming/cable services. This stream of revenue will dry up as they take back their IP. It might take them a long time to have enough users on Disney+ to cover the lost licensing revenue. Netflix has ~150M paying subscriptions. Let's say that $0.20 of your Netflix subscription go to Disney (you can adjust it to whatever you think it might be). That's 30M a month. At $10/m, Disney+ would need 3 million users just to break even with what they used to make from Netflix. How many active users (or what price point) will Disney need to justify the investment? https://redef.com/original/nine-reasons-why-disney-will-succeed-and-why-four-criticisms-are-overhyped https://redef.com/original/nine-reasons-why-disney-will-succ... Towards the end of the article it talks about the challenges they will face.
ghaff 7y ago
I'm not sure I buy that. It depends on both the cable TV/satellite bundle and bundles with cable TV and other services like Internet, but $100/month is probably a pretty reasonable ballpark for the cost of a traditional channel bundle. It's pretty easy to undercut that with streaming subscriptions including something like YouTube TV.

If they all follow Disney's pricing model, that would work, but everyone wants too big a slice of the pie.

by mrkstu 7y ago

If they all follow Disney's pricing model, that would work, but everyone wants too big a slice of the pie.

Disney has admitted that they will lose money at their current price level. Which implies strongly that they'll be increasing prices substantially in the future.

yodon 7y ago
Disney has lots of ways to monetize. A slight increase in the odds your family books a Disney Cruise is a significant real monetization channel that doesn't show up in subscription pricing. Matthew Ball has a good analysis of these models[0]. [0]https://redef.com/original/nine-reasons-why-disney-will-succeed-and-why-four-criticisms-are-overhyped https://redef.com/original/nine-reasons-why-disney-will-succ...
megablast 7y ago
They admitted they will lose money for the first few years, not forever. Like almost every single product. Do you think the iPhone or Xbox made a profit in the first few years, when you count the money spent on research and factories?
kevin_thibedeau 7y ago
How do you lose money on content you already own? This is just Hollywood accounting in effect.
- TulliusCicero 7y ago
  There's a cost to providing the service in terms terms of bandwidth, servers, and development staff. There's also a cost to the new, original content they're putting on there, like the Mandalorian.
- arthens 7y ago
  Disney is currently making bank by licensing their catalogue to various streaming/cable services. This stream of revenue will dry up as they take back their IP. It might take them a long time to have enough users on Disney+ to cover the lost licensing revenue. Netflix has ~150M paying subscriptions. Let's say that $0.20 of your Netflix subscription go to Disney (you can adjust it to whatever you think it might be). That's 30M a month. At $10/m, Disney+ would need 3 million users just to break even with what they used to make from Netflix. How many active users (or what price point) will Disney need to justify the investment? https://redef.com/original/nine-reasons-why-disney-will-succeed-and-why-four-criticisms-are-overhyped https://redef.com/original/nine-reasons-why-disney-will-succ... Towards the end of the article it talks about the challenges they will face.

ghaff 7y ago

I'm not sure I buy that. It depends on both the cable TV/satellite bundle and bundles with cable TV and other services like Internet, but $100/month is probably a pretty reasonable ballpark for the cost of a traditional channel bundle. It's pretty easy to undercut that with streaming subscriptions including something like YouTube TV.