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Disney Bets on Netflix Customers

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Apr. 15 2019, Published 4:42 p.m. ET

Could Disney be prepping for a price war with Netflix?

Walt Disney’s (DIS) highly anticipated streaming video service, Disney Plus, is set to arrive on November 12. The company has said at an investor meeting that the service is set to cost $7 per month in the United States.

Disney has carefully priced Disney Plus, suggesting the company is preparing for a price war. Reuters has reported that the $7 monthly price is lower than the $7.50 analysts expected, and about half the cost of Netflix’s most popular plan. In January, Netflix hiked prices across its service tiers, boosting its standard plan’s cost by 18% to $13 per month.

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Disney aiming for 90 million subscribers in five years

Disney appears to be betting that Netflix customers feeling frustrated by price hikes will embrace its Disney Plus service. Disney Plus is part of Disney’s response to cord-cutting, a practice that continues to deteriorate pay-TV companies’ customer base—last year, Comcast (CMCSA) lost ~370,000 pay-TV subscribers, and Charter Communications (CHTR) lost 244,000.

Dish Network (DISH) and AT&T (T) have also responded to cord-cutting by launching their own Netflix competitors, SlingTV and DIRECTV Now, respectively. In Disney’s fiscal first quarter (ended December), its revenue fell slightly year-over-year to $15.3 billion.

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