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Netflix-Disney+ Clash to Bring Aggressive Pricing and Marketing

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Walt Disney’s (DIS) Disney+ video service is set to launch next week, on November 12. For Netflix (NFLX), the launch could intensify competition in the subscription video market.

In September, Disney began accepting preorders for Disney+ from anyone. It had previously opened a limited window for its customers to preorder Disney+ at under $4 per month. The service will normally cost $6.99 per month.

Americans have responded well to the Disney+ opportunity. TechCrunch, citing Jumpshot data, reports that more than 1.0 million US consumers have already preordered Disney+. We think persuading over a million people to purchase a service they have neither seen nor tested speaks to the strength of Disney’s pricing and marketing strategy.

Disney has said it’s treating Disney+ as its most important product launched in almost 15 years. It has gone all out to ensure its Disney+ video service is a success.

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Disney prices Disney+ competitively

One of Disney’s major strategies for Disney+ is pricing the video service competitively. At $6.99 per month, Disney+ is cheaper than Netflix’s lowest-cost plan at $8.99. Netflix’s most popular plan costs $12.99.

Netflix, with 60.6 million US subscribers and 158.3 million global subscribers, is the market leader. As competitors are keen to take Netflix customers, they are undercutting its pricing. Apple, whose Apple TV+ video service launched last week, has also priced its service competitively. Apple TV+ costs $4.99 per month, nearly half of what Netflix charges for its basic plan.

Disney cuts off Netflix to create room for Disney+

Disney’s other major strategy is aggressive marketing. As we’ve discussed previously, Disney has stopped accepting Netflix ads on its television networks. With that single action, Disney denied Netflix access to its TV audience and reserved more airtime on its network to promote iDisney+. As The New York Times has noted, Disney may be new to selling video subscriptions, but its marketing for Disney+ is unrivaled. If Disney+ succeeds, it could help Disney survive cord-cutting, which is shrinking the traditional pay-TV market.

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