Walt Disney (DIS) thinks that Disney+ is its most important product launch since Bob Iger became its chief executive in 2005. As a result, Disney has gone to great lengths to promote Disney+. The company removed Netflix ads from its television networks to reserve more television airtime for Disney+ advertising. Walt Disney also made sure that it priced Disney+ competitively compared to what Netflix charges.
Disney+ extends its competitive attack beyond Netflix
No doubt, a lot of Disney+’s attacks have been directed at Netflix (NFLX)—the video streaming market leader. However, this week, Disney has shown that it would smite any competitor to ensure that Disney+ becomes a success.
This week, Disney added Google as a Disney+ distribution partner. The strategy that Disney has employed in the Google pact leaves no doubt that Apple is on target. Disney and Google have teamed up on a Disney+ promotion. According to the promotion, people who purchase a new Chromebook device will qualify to get a Disney+ subscription free for three months. The promotion opened on November 25 and will run until the end of January 2020.
With the Google pact, Disney seems to assail a strategy that Apple employed early on to promote its Apple TV+ service. Apple provides a free Apple TV+ video subscription for one year to people who purchase certain hardware products. Apple TV+, a rival to Disney+ and Netflix, is priced even more competitively. Apple TV+’s subscription costs $4.99 per month. Disney+ charges $6.99 per month, Netflix’s plans start at $8.99 per month.
If Apple’s free Apple TV+ subscription with hardware purchases is attractive, Disney will challenge it. For Netflix, Disney’s deal with Google for free Disney+ with a Chromebook purchase just added a twist to the competition. For someone who might have thought to purchase a Netflix subscription, Disney just made them think twice.
Disney hopes that after people try out Disney+ for three months though the Google Chromebook promotion, they will see its entertainment value and stay as subscribers.
Disney+ understands it is up against a giant
Disney+ launched in a market that Netflix has dominated for years. Netflix finished the third quarter with more than 60 million subscribers in the US. That is more than twice as large as Hulu’s subscriber base. For Disney, Netflix has opened a wide lead that requires an aggressive marketing and pricing strategy. So, Disney is doing exactly that. Months before Disney+ launched, the company allowed its customers to preorder Disney+ for three years in advance for less than $4 per month.