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The Walt Disney Company’s Outlook: To 2018 and Beyond

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Part 2
The Walt Disney Company’s Outlook: To 2018 and Beyond PART 2 OF 10

How Disney Could Price Its ESPN and Disney-Branded Streaming Services

Pricing of Disney’s streaming services

According to an August 21 FierceCable report, The Walt Disney Company (DIS) could price its Disney-branded streaming service at $5 per month. In this report, MoffettNathanson analyst Michael Nathanson stated that the service could be set at this price point to encourage wider adoption.

On August 8, Disney was asked about its pricing strategy during the company’s fiscal 3Q171 earnings call. Disney stated that it was still in the process of determining the price point for both streaming services. The media giant indicated that it wanted both streaming services to have a wide distribution reach.

How Disney Could Price Its ESPN and Disney-Branded Streaming Services

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Disney indicated that this did not mean it would price its streaming services at a discount and that it would adopt a reasonable pricing strategy.

Pricing of other video streaming services

As the chart above indicates, Netflix’s (NFLX) plans average about $10 per month. Among the over-the-top services of pay-TV operators, Dish Network’s (DISH) Sling TV is priced at $20 per month. AT&T’s (T) DIRECTV Now service is priced at $35 per month.

The pricing of video streaming services has been a key factor in differentiating these services from one another. Dish’s Sling TV has also introduced two packages—Sling Orange and Sling Blue priced at $20 and $25 per month, respectively. With these two packages, Dish aims to attract users across all demographics.

According to an August 21 FierceCable report, video streaming services should be priced below traditional pay-TV services to drive a wider reach among viewers. In our view, it’s possible that Disney could follow the same pricing strategy for its video streaming services.

  1. fiscal 3Q17 ended July 1, 2017
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