Netflix vs. Disney+ Streaming Wars: Ad-Supported Tiers

 by Ray Keating

News/Analysis

DisneyBizJournal.com

October 15, 2022

 

The ad-supported options in the streaming “wars” are about to expand, with Netflix adding an ad-supported tier on November 3 – a month before the Disney+ ad-supported service comes on line.

Netflix will charge $6.99 per month. That will be a dollar less per month than what Disney+ will charge for its ad-supported streaming option.

 

Netflix reported that ads will be 15-30 seconds in length, and will run before and during programs. There will be an average of 4-5 minutes of ads per hour. As for advertisers, they will be able to target audiences by country and by genre (such as action, sci-fi, drama, etc.), while also making sure that ads do not run during content that do not align with their brand.

 

The price of Disney+ without ads also will increase by one dollar per month to $10.99 in early December. That compares to Netflix’s $9.99 for its basic non-ad option.

 

Other major streaming services that offer ad-supported options are Paramount+ ($4.99 per month with ads and $9.99 without), Peacock ($4.99 per month with ads and $9.99 without), HBO Max ($9.99 per month with ads and $14.99 without), and Disney’s Hulu ($7.99 per month with ads and $14.99 without). The monthly cost of ESPN+ was increased by a dollar in August, and Hulu also by $1 early this week.

 

The Disney bundle – Disney+, ESPN+ and Hulu (ad supported) – currently costs $13.99 per month, and will rise to $14.99 in December.

 

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Ray Keating is the editor, publisher and economist for DisneyBizJournal.com; and author of the Pastor Stephen Grant thrillers and mysteries, and the Alliance of Saint Michael novels; and assorted nonfiction books. Have Ray Keating speak your group, business, school, church, or organization. Email him at raykeating@keatingreports.com.

 

The views expressed here are his own – after all, no one else should be held responsible for this stuff, right? 

 

Ray Keating is the author of the Pastor Stephen Grant thrillers and mysteries. Pre-Order Persecution: A Pastor Stephen Grant Novel. Keating says, “I think Persecution might be the most action-packed of any of the Pastor Stephen Grant books so far.”

Signed books at https://raykeatingonline.com/products/persecution  

Kindle edition at https://www.amazon.com/dp/B0BHHJNNB4

 

Two great ways to order Cathedral: An Alliance of Saint Michael Novel, which is the first in the Alliance of Saint Michael series. Signed paperbacks here and the Kindle edition here. 

 

Two great ways to order Ray Keating’s new nonfiction book – The Weekly Economist: 52 Quick Reads to Help You Think Like an Economist. Signed paperbacks here, and paperbacks, hardcovers and Kindle editions here.  

 

Also, check out Ray’s podcasts – the Daily Dose of Disney, Free Enterprise in Three Minutes, and the PRESS CLUB C Podcast.

Different Takes on Disney’s Hulu

 by Ray Keating

News/Analysis

DisneyBizJournal.com

July 19, 2022

 

Depending on who one turns to for an assessment, Hulu is either a leader and an opportunity for Disney, or a potential financial burden.

Comcast still owns 33 percent of Hulu, with Disney controlling the rest, gaining Fox’s 33 percent Hulu stake in the 2019 acquisition of Fox. As it stands now, Comcast has a passive role in Hulu and has agreed to hold that position until 2024. After that, Comcast can force a buyout by Disney based on a total valuation of $27.5 billion – with Comcast then getting more than $9 billion from Disney – or Disney could choose to execute the buyout. That price tag, however, could go higher if an independent party determines that the fair market value is, in fact, higher. This is one of the big-dollar unknowns left behind by Bob Iger.

 

If you read a recent take at CNBC, Hulu is a problem child for Disney, not really fitting in and Disney not offering a clear vision for the service. Indeed, it was emphasized that perhaps Hulu could be sold to Comcast, as opposed to Disney completing its purchase of Hulu from Comcast. However, it’s hard to see how the possible challenges laid out for Hulu with Disney, if accurate, of course, wouldn’t turn out to be much the same for Comcast, which already has the Peacock streaming service.

 

Meanwhile, a recent Hollywood Reporter story offered the following: “At the very least, Disney will be forced to strike a deal with Comcast over the future of Hulu, with the cable giant able to force Disney to buy out its 33 percent stake in 2024 for market value. Given Chapek’s ambitions in streaming, an early buyout could give Disney more optionality in its plans.” An early buyout? Wow. That’s quite a different take.

 

And then there’s a Wall Street Journal article published on July 18 that, based on an analysis done by Antenna, reported Hulu subscriptions growing faster than Disney+ subs. It was noted: “New subscriptions to Hulu have outpaced those of Disney’s flagship streaming platform, Disney+, in 18 of the past 24 months, and total new subscriptions to Hulu have exceeded those to Disney+ in each of the last six quarters…”

 

Indeed, it also was noted in the CNBC story: “Hulu has doubled its total subscribers since 2018. The streaming service continues to churn out critically acclaimed series, including ‘Pen15,’ ‘Dopesick’ and ‘The Dropout.’” 

 

According to the reporting, Disney basically confirmed the data presented in the Journal analysis. So, the assertions that Disney might sell Hulu to Comcast appear pretty absurd.

 

Analysts do seem to be unified in looking for greater convergence between Disney+ and Hulu. Maybe, and it’s unclear as to what that would mean exactly. That question also goes to how distinct Chapek views the Disney brand. He has indicated a willingness to be more expansive, beyond the strictest family-friendly-fare criteria. Yet, there remains plenty of material that is hard to imagine fitting on Disney+, and those also are opportunity-rich areas, which further strengthens Hulu as part of the Disney portfolio.

 

Looking ahead for the near term at least, it’s hard to deny that the Disney bundle – Disney+, ESPN+ and Hulu at one price – will help the company gain or keep subscribers across all three streaming services in a tougher economy.

 

Is Hulu a problem child or a valuable asset that’s aiding Disney’s streaming dreams? I strongly lean toward the latter, but the company would benefit from more explicitly showing where it plans to take Hulu, and how it fits in with or alongside Disney+.

 

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Ray Keating is the editor, publisher and economist for DisneyBizJournal.com; and author of the Pastor Stephen Grant thrillers and mysteries, and the Alliance of Saint Michael novels; and assorted nonfiction books. Have Ray Keating speak your group, business, school, church, or organization. Email him at raykeating@keatingreports.com.

 

The views expressed here are his own – after all, no one else should be held responsible for this stuff, right?

 

Two great ways to order Cathedral: An Alliance of Saint Michael Novel, which is Ray’s sixteenth work of fiction, and the first in the Alliance of Saint Michael series. Signed paperbacks here and the Kindle edition here. 

 

Two great ways to order Ray Keating’s new nonfiction book – The Weekly Economist: 52 Quick Reads to Help You Think Like an Economist. Signed paperbacks here, and paperbacks, hardcovers and Kindle editions here.  

 

Get all of Ray Keating Pastor Stephen Grant thrillers and mysteries in paperback and for the Kindle at Amazon.com and signed books at www.RayKeatingOnline.com. 

 

Also, check out Ray’s podcasts – the Daily Dose of Disney, Free Enterprise in Three Minutes, and the PRESS CLUB C Podcast.

Cheaper Version of Disney+ Coming with Ads

 by Ray Keating

News

DisneyBizJournal.com

March 4, 2022

 

Disney announced today that it will be adding a new Disney+ tier late this year in the U.S. and internationally in 2023 that will offer a cheaper monthly subscription price and be ad-supported.

Kareem Daniel, chairman of Disney Media and Entertainment Distribution, said, “Expanding access to Disney+ to a broader audience at a lower price point is a win for everyone - consumers, advertisers, and our storytellers. More consumers will be able to access our amazing content. Advertisers will be able to reach a wider audience, and our storytellers will be able to share their incredible work with more fans and families.”

 

The company said that this ad-supported option will help in “achieving its long-term target of 230-260 million Disney+ subscribers by FY24.” At the close of its last quarter, Disney+ subscribers came in at 129.8 million.

 

CNBC also pointed out, “Adding an advertising-support tier will allow Disney to boost average revenue per user — a metric that currently trails most rivals. Comcast Chief Executive Officer Brian Roberts said last quarter NBCUniversal’s Peacock had ARPU of nearly $10 per month per user, driven largely by advertising. The average revenue per user per month for Disney+ in the U.S. and Canada was $6.68 last quarter.”

 

Within two hours of this announcement, Disney stock was down by nearly 4 percent. However, that reflected concerns and uncertainties relating to Russia’s attack on Ukraine.

 

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Ray Keating is the editor, publisher and economist for DisneyBizJournal.com, and author of the Pastor Stephen Grant novels and assorted nonfiction books. Have Ray Keating speak your group, business, school, church, or organization. Email him at raykeating@keatingreports.com.

 

The views expressed here are his own – after all, no one else should be held responsible for this stuff, right?

 

Get more out of 2022 with The Disney Planner 2022: The TO DO List Solution! It combines a simple, powerful system for getting things done with encouragement and fun for Disney fans, including those who love Mickey, Marvel, Star Wars, Indiana Jones, Pixar, princesses and more. Also, “The Disney Planner 2022: The TO DO List Solution” comes with a handy spiral binding for easy use. 

 

Keating has three new books out. Vatican Shadows: A Pastor Stephen Grant Novel is the 13^th thriller/mystery in the Pastor Stephen Grant series. Get the paperback or Kindle edition at Amazon, or signed books at www.raykeatingonline.com. Past Lives: A Pastor Stephen Grant Short Story is the 14th book in the series. Again, get the paperback or Kindle edition at Amazon, or signed book at www.raykeatingonline.com. And order the 15th book in the series What’s Lost? A Pastor Stephen Grant Short Story – grab it at Amazon.com or signed editions at www.raykeatingonline.com. 

 

Also, check out Ray’s podcasts – the Daily Dose of Disney, Free Enterprise in Three Minutes, and the PRESS CLUB C Podcast.

Diller Dead Wrong on Streaming

 by Ray Keating

Commentary

DisneyBizJournal.com

May 23, 2021

 

Are all other streaming services, including Disney+, destined to play second fiddle to Netflix … forever? That’s what media mogul Barry Diller told CNBC late last week. 

 

Diller, of course, is dead wrong. In free enterprise, maintaining one’s market position is not destiny – indeed, anything but. And that reality is only intensified and accelerated in an era of great technological advancements.

Diller’s long career and success in the television and media business naturally give him credibility to have his views tapped by CNBC and others. He told CNBC, “Netflix won this several years ago, they’re the only ones who have the scale and momentum to keep making these somewhat lunatic investments in programming. You cannot compete with the momentum, the scale, no one will ever be able to do that.”

 

That’s right, Diller asserted that “no one will ever be able” to compete with Netflix.

 

The CNBC Diller appearance came on the heels of the announcement by AT&T that it would be combining its content arm, WarnerMedia, with Discovery, to create a new company. 

 

That obviously strengthens the HBO Max streaming service. And then there’s Disney+, which even with a recent slowdown has gained subscribers at a far faster rate than originally expected, along with Amazon Prime, Comcast’s Peacock, ViacomCBS’s Paramount+, YouTube, and more.

 

Netflix gained a major competitive advantage by being the early or first mover on streaming. But the notion that they have so much revenue, scale and momentum that they do not face serious competition is absurd. The history of free enterprise is littered with early movers who gave way to other businesses that improved on quality, service, innovation, et al.

 

If Netflix continues to produce quality content in an appealing and convenient way for consumers, then it very well may remain the streaming leader for some time. But if other giants, such as Disney and Amazon, do things better, then Netflix could easily slip behind others. And then there’s the fact that the ongoing revolution in computer and telecommunications technologies will serve as fuel or as an opportunity for the next great company or product to challenge Netflix, Disney, Amazon and others already established in the market, or challenge the entire streaming model itself.

 

The fact is that no one – including Barry Diller – has a crystal ball in terms of where entrepreneurship, invention and innovation will take industries and consumers. That’s good news for entrepreneurs, for creators, for nimble companies and workers, and for consumers – but perhaps not so much for those who might have thrived earlier but lack vision when it comes to the future.

 

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Ray Keating is the editor, publisher and economist for DisneyBizJournal.com, and author of the  Pastor Stephen Grant novels and assorted nonfiction books. Have Ray Keating speak your group, business, school, church, or organization. Email him at raykeating@keatingreports.com.

 

The views expressed here are his own – after all, no one else should be held responsible for this stuff, right?

 

Keating has two new books out. Vatican Shadows: A Pastor Stephen Grant Novel is the 13ththriller/mystery in the Pastor Stephen Grant series. Get the paperback or Kindle edition at Amazon, or signed books at www.raykeatingonline.com. Past Lives: A Pastor Stephen Grant Short Story is the 14th book in the series. Get the paperback or Kindle edition at Amazon, or signed book at www.raykeatingonline.com. And pre-order the 15th book in the series What’s Lost? A Pastor Stephen Grant Short Story.

 

Also, check out Ray’s podcasts – the Daily Dose of Disney, Free Enterprise in Three Minutes, and the PRESS CLUB C Podcast.

 

You also can order his book Behind Enemy Lines: Conservative Communiques from Left-Wing New York  from Amazon or signed books  at RayKeatingOnline.com. His other recent nonfiction book is Free Trade Rocks! 10 Points on International Trade Everyone Should Know. 

 

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Disneynomics: Disney+ and Its Effect on Streaming, Including Netflix

by Ray Keating

Disneynomics Column

DisneyBizJournal.com

September 13, 2020

Reed Hastings, the Netflix CEO, and other observers are impressed with what Disney has achieved so far with Disney+, and expectations have only become more robust looking ahead. That’s a good thing, since uncertainty reigns across many of Disney’s other ventures.

In July, Netflix reported that it had gained 10.1 million subscribers in the quarter ending in June of this year. And that came after adding 16.1 million in the previous quarter. Netflix now has more than 190 million subscribers globally, and for the year ending in June, Netflix revenue registered $22.6 billion, which was a 28.4 percent increase over the previous year. 

And who is number 2 in terms of subscribers? That would be Disney+ at more than 60.5 million, and of course, Disney+ only came online in November of last year. However, total subscription numbers for the Walt Disney Company top 100 million when combining Disney’s Disney+, Hulu and ESPN+.

Hastings apparently is impressed with what Disney has achieved. In a September 7 report, Bloomberg News asked Hastings to identify his number one competitor: “‘Disney,’ he said. ‘If you’d asked us a year ago, “What are the odds that they’re going to get to 60 million subscribers in the first year?” I’d be like 0. I mean how can that happen? It’s been super impressive execution.’”

Competition and too many streaming options? Hastings doesn’t seem worried: “‘There is no such thing as subscription fatigue,’ [Hastings] said. ‘Disney has “The Mandalorian” and we have “Stranger Things.” They are somewhat complementary. People will subscribe to both.’”

In an analysis released early last week by Deutsche Bank, analyst Bryan Kraft says streaming promises to be the big plus for Disney. Indeed, based on his take on the streaming end, Kraft upgraded his rating on Disney from a hold to a buy, with a target price of $163 (the stock closed on Friday, September 11, at $131.75). As MarketWatch noted:

The company has “the most clear path to successfully transitioning its general entertainment programming and content production businesses into a globally scaled, vertically integrated streaming entertainment leader,” Kraft wrote. “The clearest sign that Disney is succeeding in transitioning its business model, aside from the impressive subscriber results, has been management's decision to shut down some of its traditional networks in international markets, including the UK,” he continued, as Disney has been willing to write down the goodwill associated with such moves.

Perhaps most interesting was Hastings’ acknowledging a shift in strategy at Netflix: “Netflix is no longer solely focused on making high-quality, award-winning shows. Hastings and his co-CEO Ted Sarandos say building new franchises is the next big mission. The want to identify stories that can stretch across multiple TV shows, movies, toys and lunch boxes, appealing to viewers all over the world.”

That, of course, and as Bloomberg noted, sounds very much like a Disney strategy. Disney’s influence already is being seen, with recognition of value in Disney’s model. At the same time, Disney has learned from Netflix that a regular stream of new content is vital to sustaining and growing subscribers. Also, consider that the Netflix shift is about adding a Disney model onto their existing “high-quality, award-winning shows” strategy, not replacing it. That points to the market leadership and enormous revenue being raked in by Netflix. 

Can Disney seriously challenge Netflix to become number one in streaming? Sure, they can. We’ll see if they will. Part of the story will be told as new production ramps up post-pandemic, and another part could be about Disney winning a much bigger part of live sports, such as NFL Ticket when that becomes available after the 2022 season.

For streaming aficionados and bingers, strap in. Toss HBO Max, Peacock, Amazon’s Prime Video, YouTube and others into the mix, and this promises to be a great deal of fun.

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Ray Keating is the editor, publisher and economist for DisneyBizJournal.com, and author of the Pastor Stephen Grant novels. He can be contacted at  raykeating@keatingreports.com.

Also, get the paperback or Kindle edition of Ray Keating’s new book Behind Enemy Lines: Conservative Communiques from Left-Wing New York.

“Muppets Now” Brings Sadness, “Psych 2” Serves Up Joy

by Ray Keating

Review

DisneyBizJournal.com

August 13, 2020

Like many others during a pandemic and period of economic woes (toss in a looming presidential election), I need a break now and then. While I enjoy all kinds of storytelling, sharp wit and general silliness tends to fit the bill during troubled times. Therefore, I was excited to see that two of my favorite founts of fun – The Muppets and the television show Psych – were returning via the Disney+ and Peacock streaming services, respectively.

While the Psych 2: Lassie Come Home movie provided joy, I came away from the first two episodes of Muppets Now actually kind of sad.

Let’s go to the good news first. Psych, which ran for eight seasons on the USA network (from 2006 to 2014) and followed by Psych: The Movie in December 2017, is a comedy-detective show focused on Shawn Spencer (James Roday Rodriguez), a fake psychic with acute observational skills, and his close friend since childhood, Burton Guster (Dule Hill). Via their “Psych” business, the two work with the Santa Barbara Police Department to solve murders. The humorous, silly, pop-culture-filled (with stuff from the 80s to present day) banter and interplay between Shawn and Gus stand out as the treasure at the center of this show. The two never fail to make me smile and laugh out loud.

But there’s more, including a wonderful cast of supporting characters. They are Detective Juliet O’Hara (Maggie Lawson), Detective Carlton Lassiter (Timothy Omundson), Henry Spencer, Shawn’s dad and a retired cop (Corbin Bernsen), Police Chief Karen Vick (Kirsten Nelson), Woody, the funny and creepy coroner (Kurt Fuller), and Officer Buzz McNab (Sage Brocklebank). 

Psych 2 manages to hit all the right notes, as Shawn, Gus and Company try to help Lassiter and along the way get involved in a case perhaps involving the supernatural. The movie overflows with quips, wordplay and refreshing humor. Plus, at its best, Psych made clear the love and friendships shared by the characters, and that comes through in various touching ways in Psych 2. This is 5-star fun for all.

Now for the bad news. Muppets Now misses nearly every note. 

One of the great things about The Muppets – from their original television show to the various movies, as well as Muppet Vision 3D in Walt Disney World – has been that they accomplished what only a few other vehicles have over the years. That is, something on the surface meant for children manages to also provide humor that clearly flies over the heads of little tots but lands sweetly for adults. In this way, The Muppets stand side by side with such wonders as Looney Tunes, Animaniacs, Phineas and Ferb, and The Adventures of Rocky and Bullwinkle and Friends.

Alas, though, Muppets Now comes up woefully short – for the young ones and for adults. To me, The Muppets worked thanks to an odd mix inspired by comedy classics, such the Marx Brothers and the Bob Hope and Bing Crosby “Road” movies, brought up to date. And the fact that all of this was being delivered by puppets that many of us have come to know and love as their own characters, simply adds to the zaniness and warmth of The Muppets.

Unfortunately, little of this can be found in Muppets Now. The humor is flat, and sometimes even painful. And the core of the characters has been lost. It’s all rather bewildering as to how this poor rendition of the beloved Muppets came to be. It seems like someone at Disney+ was snoozing during the pitch meeting.

If you want a reminder of just how good The Muppets were and could be, you can, of course, watch the old show and the movies. Interestingly, though, you also can catch an episode from another Disney+ streaming show – Prop Culture (read our review of this excellent show). In the eighth episode, host Dan Lanigan takes us on a hunt for props from The Muppet Movie. Along the way, we get glimpses of just how delightful The Muppets have been – with a few clips from the movie – and can be, as Dan has an amusing chat with Gonzo the Great.

Alas, though, none of that delight can be found in Muppets Now.

By the way, is a Psych 3 movie coming? Some interviews indicate that it just might. For example, Decider.com reported:

“I definitely think that there’s a better chance that we do a third movie than that we don’t,” Roday Rodriguez told Collider in a recent interview. “The reason I say that is because I think our fans are still very much with us.”

Added Hill, “In the midst of all the crazy stuff that goes on in the world, and with all of the drama and pandemics and issues that are out there, as long as we can keep delivering a moment of levity for families, I think there’ll be more stories to tell. When we stop delivering the laughter, that will be time for us to pack it on up.”

Count me in! I want to see more of Shawn, Gus and the rest of the Psych gang. As for more Muppets, my heart says “yes,” but my head tells me that after seeing Muppets Now, Kermit and Company need someone at the helm that actually understands or recalls what The Muppets are about in the end.

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Ray Keating is the editor, publisher and economist for DisneyBizJournal.com, and author of the Pastor Stephen Grant novels. He can be contacted at  raykeating@keatingreports.com.

Also, get the paperback or Kindle edition of Ray Keating’s new book Behind Enemy Lines: Conservative Communiques from Left-Wing New York.