Disney+ Has Put Apple TV+ in a Bind

1 minute read
| Analysis

Disney+ won’t launch until November 12, but it’s already putting strategic pressure on Apple TV+.

Disney+ logo

Disney+ will launch November 12.

The first pressure point is pricing. Apple Music costs US$10/month. Apple charges $10/month for Apple News+. No price has been declared for Apple Arcade, but a 9to5Mac survey suggests that $10/month would be expected.

Movies and TV shows are considered more valuable than songs and, probably, a news feed. I’d bet that Apple originally planned to charge $12 to $15/month for Apple TV+. (On par with Netflix or Amazon.)

Disney’s Smart Move

But Disney’s announced price of $6.99/month has blown that idea out of the water. And it’s not just the pricing. That Disney price includes, according to the New York Post, a lot of compelling content.

Calling it an “exciting and challenging time” for Disney, [Disney CEO Bob] Iger said the service will be built around five Disney properties: Disney, Pixar, Marvel, LucasFilm and assets it acquired from Twenty-First Century Fox, like National Geographic.

That Disney content alone makes for a compelling case to customers. For example, Media Play News cites UBS research.

The research firm said that 43% of respondents in an internal survey said they were interested in subscribing to the $6.99 Disney+ service.

That 43% is an amazing result.

Apple’s Portfolio

This is a real problem for Apple. Even though Apple has 30 or so projects in the works, that pales in comparison to Disney’s announced library. The issue is how Apple can justify a premium monthly price for such a small selection of shows. The New York Post recently explained the dilemma and what Apple may have to do.

But unlike Disney, which also plans to launch a new streaming service this year, Apple lacks a library of content that consumers can riffle through when they are done watching the new stuff — and has been internally debating whether to acquire one, a well-placed source said.

And, coincidentally (?), Variety has predicted Sony Pictures will be the target.

So Apple has to figure out if buying into an existing, pricey library has an ROI and then set the monthly subscription fee attractively, likely lower than originally intended. Absolutely, charging more than Disney would be a mistake.

Disney has put the newbie Apple in a bind by blowing up its pricing and value proposition. It’ll be interesting to see how Apple navigates this conundrum. In any case, a long, six month free trial seems called for.

No one said this would be easy for Apple.

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John Q
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John Q

There’s no doubt Disney’s content is hard to beat, especially at $7/month. That announcement made some waves, in contrast to Apple’s March non-event where it trotted some celebrities on stage, but little else. But the real question is — how long will Disney keep the price at that level? Once Disney has established a subscriber base, bet on that price going up. Apple will still have to respond in some fashion, and I suspect it will end up bundling its services (provided its contracts with the content cartels allow it), to promote the perception of value, and away from the… Read more »

Lee Dronick
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Lee Dronick

Will they be offering movies and shows of interest to me?