Disney preps a super streaming bundle

Entertainment giant will market combo of Disney+, ESPN+ and Hulu's ad-supported SVoD service for $12.99 per month, about $5 less than the à la carte cost.

Jeff Baumgartner, Senior Editor

August 7, 2019

3 Min Read
Disney preps a super streaming bundle

Disney overshadowed a sub-par fiscal Q3 by unveiling plans to create a super-streaming bundle that teams ESPN+ and the ad-supported version of Hulu's subscription VoD service with the forthcoming Disney+ service for $12.99 per month.

That value-focused bundle, slated to become available when Disney+ debuts on November 12, should help Disney quickly ramp up the subscriber totals of Disney+, which will sell for $6.99 per month on a stand-alone basis.

Disney's pending $12.99 bundle will help consumers save a few bucks. The three services would cost almost $18 if purchased a la carte. By melding these services, Disney may also overcome subscription fatigue as consumers wrestle with a growing array of premium subscription OTT service options from competitors like Netflix, Amazon and a new one from AT&T/WarnerMedia called HBO Max. It's increasingly challenging for households to determine how many SVoD offerings can fit within their monthly entertainment budgets.

Speaking on Disney's Q3 call on Tuesday, company chairman and CEO Bob Iger said marketing for Disney+ will start ramping up later this month. The Mouse is looking to team up with various digital distribution partners, including Apple, Amazon and Google, to shore up the reach of the new streaming service.

"You can expect that we will conclude deals with them as distribution partners," Iger said. It's not clear how Disney is progressing with similar Disney+ distribution deals with more traditional MVPDs such as Comcast. "We think it's important for us to achieve scale relatively quickly and they [distribution partners] will be an important part of that. Nothing to announce specifically, except we've had conversations with all of them. They're all interested in distributing the product."

Disney has set a high bar for Disney+, predicting the service will pull down 60 million to 90 million subs worldwide (with about two-thirds coming from outside the US), by the end of the company's fiscal 2024.

Rising DTC contribute to sub-par Q3
But alongside optimism for Disney's direct-to-consumer plans (DTC), the company missed its fiscal Q3 numbers, causing shares to drop more than 6% in Wednesday morning trading. Revenues for fiscal Q3 -- the first period to fully consolidate the acquired Fox assets and Disney's full control of Hulu -- were $20 billion, short of MoffettNathanson's expectations of $22 billion.

Disney's Q3 problems were driven by a $170 million operating loss at the 21st Century Fox film studio and steep expenses associated with Disney's DTC and international segments.

Those DTC efforts continue to cost Disney a pretty penny. While revenues for DTC/International surged to $3.85 billion, the segment's operating loss ballooned to $553 million, versus $168 million in the year-ago quarter. The consolidation of Hulu, investments in ESPN+ and costs linked to the upcoming debut of Disney+ led to the quarter's wider operating losses.

For those reasons, Disney expects the DTC/International segment to generate about $900 million in operating losses in fiscal Q4, up from losses of $560 million in the year-ago period.

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— Jeff Baumgartner, Senior Editor, Light Reading

About the Author(s)

Jeff Baumgartner

Senior Editor, Light Reading

Jeff Baumgartner is a Senior Editor for Light Reading and is responsible for the day-to-day news coverage and analysis of the cable and video sectors. Follow him on X and LinkedIn.

Baumgartner also served as Site Editor for Light Reading Cable from 2007-2013. In between his two stints at Light Reading, he led tech coverage for Multichannel News and was a regular contributor to Broadcasting + Cable. Baumgartner was named to the 2018 class of the Cable TV Pioneers.

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