The Walt Disney Company (DIS) has rolled out its Disney+ video service in five countries since its launch on November 12. It plans to head to more countries next year, and European countries such as France are the priority markets. The service will launch in France on March 31, 2020.
Disney+ enters exclusive distribution arrangement with Canal+
Disney has partnered with pay-TV provider Canal+ to distribute Disney+ in France. DIS and Canal+ have entered into an exclusive arrangement for the service, meaning Canal+ will be its sole distributor in France. Canal+ is France’s largest pay-TV network.
Canal+’s deal with Disney is similar to the arrangement it has with Netflix (NFLX). In September, Canal+ announced its securing of a deal allowing it to sell a pay-TV bundle that included Netflix. Canal+ began offering the Netflix bundle on October 15. Canal+ is part of the Vivendi media conglomerate.
Netflix uses pay-TV partnerships to reach more customers
For Netflix, partnerships with pay-TV providers such as Canal+ have paid off. Thanks to such partnerships, Netflix now has access to nearly half of the world’s pay-TV households excluding China. That, in turn, means a massive pool of potential customers for Netflix.
In partnering with Canal+ for distribution in France, Disney is applying a strategy that has worked well for Netflix.
Right now, Netflix has about 60 million subscribers in the US and nearly 160 million subscribers worldwide. Disney+ signed up more than 10 million subscribers on its first day. The service is expected to finish the year with more than 20 million subscribers. The company aims to have 60 million–90 million subscribers within five years, or by 2024.
Disney’s most important product in 15 years
The traditional pay-TV market is shrinking as more households embrace video streaming in what the industry calls cord cutting. In the US, for instance, about 36 million households had ditched traditional pay-TV subscriptions as of the end of 2018. The number of US households that have cut the cord is on track to top 56 million by 2023.
Disney and other companies in the pay-TV business, such as Dish Network (DISH) and Comcast (CMCSA), have taken a hit from cord cutting. Therefore, Disney+ is viewed as the company’s answer to cord cutting. It has described the service as its most important product in about 15 years, and it’s sparing no expense in its efforts to promote it. In addition to pricing Disney+ competitively, Disney has also thrown its entire marketing machine behind the product.