Disney’s upcoming streaming service will need at least 32 million subscribers to break even. This large number isn’t too surprising, as embarking on as large a venture as starting a streaming service is never a cheap proposition, and Disney also needs to compensate for the money they’re losing by ending their relationship with Netflix. Still, time has shown that it’s rarely wise to bet against Mickey and company when it comes to business.
It was just last month that news first broke that Disney would be removing its movies and shows from Netflix – aside from the original Marvel series like Daredevil and Jessica Jones, which look to be staying put – ending an arrangement that has supplied Netflix with a large library of high profile titles, such as Rogue One: A Star Wars Story and MCU blockbusters like Captain America: Civil War and Doctor Strange.
The above films – and presumably at least a large portion of the rest of Disney’s massive library – will soon call the studio’s own streaming outlet home, with plans to launch the new service sometime in 2019. According to a report by Business Insider, financial services company UBS has crunched the numbers, and determined that Disney would need to sign up at least 32 million subscribers to break even financially.
To put that number in perspective, Netflix has about 50 million subscribers in the U.S., and that’s after over a decade of offering streaming services to its customers. As big a company as Disney is – and as big a draw as brands like Marvel and Star Wars are – it’s likely to be a tall order for the studio’s new service to gain over half of Netflix’s U.S. customer base in any kind of short time frame. If any company can do it though, it’s probably Disney, as they have a history of overcoming adversity to continue thriving in the entertainment marketplace.
It’s worth pointing out though that UBS’ math is based on a potential $9 per month subscription cost for Disney streaming, and the studio has of course not yet announced how it plans to price the service. If Disney ended up going with a lower price to help gain initial subscribers, the number they would need to sign up would obviously increase considerably from 32 million, and the reverse would be true if they went higher than $9. That said, with streaming kingpin Netflix charging $9.99, it probably wouldn’t be wise for Disney to charge more.
Source: Business Insider
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