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The Disney+ streaming service is coming, with the kind of catalogue – from Star Wars to The Avengers and The Simpsons – that'll strike fear into the hearts of its streaming and broadcast video rivals… when it eventually arrives in the UK on March 31.
The service launches in the US, Canada and the Netherlands on November 12 and on November 19 in Australia and New Zealand.
But in the UK, and almost all of Europe, the shining Disney media future is a bit further off. So why the extra wait? Simon Brew, founder and editor of Film Stories magazine, recently highlighted the licensing hurdles that Disney has to go through before a UK launch, and the most notable of those are to do with its existing contracts with European broadcasting behemoth Sky.
Brew says that it's because of the need to wait out licence terms, rather than for any technical reason, that viewers in most of Europe will have to wait for Disney+ but, he says, "it's a temporary problem, and not unique to the UK ... 20th Century Fox has pre-existing deals with broadcasters and streamers, signed before Disney took it over. And Disney itself had long and rich contracts with the likes of Sky. Ideally, Disney would have liked to have bought Sky too, but it was effectively gazumped by Comcast."
Tom Harrington, a senior research analyst at Enders Analysis, confirms that "across five European markets Disney and Sky are bound by large content deals—which apparently run into 2020—worth in the vicinity of $1 billion/year (£800m) when including Sky’s deal with Fox."
That includes the Disney channels carried by Sky, video-on-demand contracts to stream Disney films and Sky Cinema Disney, a co-branded traditional linear film channel with first subscription pay-TV film rights in the UK and Ireland to new titles distributed by Disney.
"Until the UK deal runs its course," he says, "Disney+ won't launch in the UK, with the same for the other Sky territories." Switching to a direct-to-consumer model will also impact Disney's licensing revenues in coming years and represents a major, long-term strategic shift for the company. (Disney did not respond to a request for comment for this story).
But it'll still have to keep Sky on-side if it's going to get the kind of reach it needs in the UK, Germany and Austria, Ireland, Spain, and Italy, where Sky is a dominant force in subscription TV. "As Netflix has shown," says Harrington, "if you want subscriber growth you need to be in pay-TV boxes, smart TVs and preloaded on as many platforms as you can." Last year Netflix and Sky partnered to create one subscription deal.
When the March 31, 2020 UK launch date rolls around, Disney+ will be the combined home of all things Disney, Pixar, Marvel, Star Wars and National Geographic, as well as Fox content that'll start with a new season of The Simpsons and gradually add the motion picture company's back-catalogue of family-friendly film and TV hits like The Princess Bride and Malcolm in the Middle as existing contracts with other streaming and linear TV services expire.
Disney will even end its vault programme, which saw a limited cycle of film re-releases on home video formats.
To cater to adult viewers in the US, Disney will bundle Hulu and sports network ESPN Plus together with Disney+ for $12.99 (£10.50) a month. If US viewers just want the family content, they'll pay $6.99 (£5.60) per month or $69.99 (£56.00) a year, while subscribers in the Netherlands will pay €6.99 (£6.25) per month or €69.99 (£62) per year.
In the UK, we wouldn't be surprised to see that shake down to £6.99 a month for the core Disney+ service, but it's currently not clear when Hulu is coming to Europe.
Even with the combined might of the industry's biggest back catalogue, Disney's new service is coming into a crowded and exceptionally challenging market. While switching from a cable or satellite TV subscription to Netflix or Amazon Prime Video once represented a saving on your entertainment budget, the market is becoming increasingly divided and those subscription fees add up, especially for less affluent households.
But Mark Inskip, UK and Ireland CEO of Kantar's Media Division, says the firm's research shows that British consumers are willing to pay. 52 per cent of the UK audience already pays for a TV or video streaming service, and their main reason is to access shows and films they can’t get elsewhere. That core streaming audience is younger, in the top socio-economic grades and, Kantar's research shows, watches more television now than they used to due to online streaming.
"And the good news for Disney," Inskip says, "is that 31 per cent of British video streamers have at least two subscriptions." That means there's an opportunity for Disney+ to break into the market with its roster of blockbuster and exclusive new content.
Harrington, of Enders agrees, saying that "Disney+ is the most likely of the new streaming services to make a dent in the market given the content on offer, brand identity, targeting of the family and the ability of Disney to strike carriage deals for the service."
But it's not going to be easy. Enders' data shows that UK streaming households currently have an average of 1.4 subscriptions each. Although its growth is slowing, Netflix dominates the UK with 11.6 million subscribers, while Amazon Prime Video has 5.8 million. Beyond that, NowTV has just under 2 million and the rest – both niche and mainstream – have around 100,000 subscribers or fewer. Harrington says that Disney's own UK and Ireland exclusive DisneyLife service – a relative failure for the firm with only around 100,000 subscribers – is likely to be folded into the new platform to avoid confusion.
At launch, Disney+ will be available to stream from its offical website via the usual range of browsers, as well as via dedicated apps for Apple TV, Android devices, Google's Chromecast, iOS and iPadOS devices, PlayStation 4, Roku, and Xbox One consoles.
This article was originally published by WIRED UK
