Coming soon from a galaxy far, far away: Disney takes on Netflix in UK

The streaming service Disney+ launches this month in the UK, and it has the stars and the money to shake things up

Disney will mark its entry into the European streaming wars this week when it unveils its Disney+ service at a glitzy promotional event.

The entertainment giant is seeking to challenge the dominance of Netflix and Amazon’s Prime Video, and at the private event on Thursday will unveil a formidable arsenal of content. This includes the $100m Star Wars spin-off series The Mandalorian, Pixar hits such as Toy Story and family favourites such as Frozen 2 – content it hopes will be attractive enough to get consumers to fork out for yet another streaming service.

In a bid to entice sign-ups, Disney has cut its already competitive price by 17% to £49.99 for annual subscribers, which it will offer until the consumer launch in the UK and much of western Europe on 24 March. Disney+ is significantly cheaper than Netflix, which charges £7.99 a month for its most popular package, and Prime Video, which costs £79 a year.

With the unexpected announcement that chief executive Bob Iger – who has led Disney successfully for decades and is a Disney+ evangelist – is to step back and become chairman, the company needs to maintain its momentum with a successful European roll-out.

Disney is expected to get off to the same roaring start in Europe as its Mandalorian-fuelled launch in the US last year. The company hit 10 million sign-ups on day one and 26.5 million after three months– a number that Netflix took five years to reach.

But despite owning some of the most successful franchises in history – Marvel films, from Iron Man to Avengers: Endgame, have made $22.5bn (£17.5bn), Star Wars another $10bn – it will take time for Disney to build a library to challenge Netflix.

“In the short term, certainly the first few months of launch, Disney+ will do well in Europe,” says Jonathan Broughton, lead analyst at Media Business Insight. “Disney’s challenge will be to keep its impetus going. It has planned for a wave of high-profile content to land at launch, but it [will now be] a while until the next tranche. They don’t have that many Mandalorians ready to go, and consumers have a high demand for fresh, high-quality content.”

Disney’s launch numbers have been flattered by a US deal for customers of telecoms operator Verizon to get the service free for a year. And after its stellar start, growth has slowed significantly, with the total number of subscribers climbing to 28.6 million as of 3 February. The company is aiming for 60-90 million subscribers by 2024, when it expects to break even, while Netflix has more than 160 million globally with more than 12 million in the UK.

The world’s largest entertainment company, with a market value of $213bn, has the muscle to pose the sternest challenge to Netflix since it embarked on its streaming future more than a decade ago. Disney spends $24bn on its film and TV empire, with about $7.6bn of that on sports rights for ESPN. Spending on making original shows for Disney+, including Tom Hiddleston reprising his big-screen Marvel role in a spin-off series called Loki, will rise from $1bn to $2.5bn annually by 2024. Reed Hastings, Netflix’s chief executive, has said his company is set to raise its $15bn annual spending significantly to protect its position. Amazon spends about $7bn annually.

Disney also faces the problem of attempting to unpick some of the licensing deals it already has in place. For example, The Simpsons, which Disney took control of following its $71bn deal to buy Rupert Murdoch’s Fox last year, is on its US service, but first-run UK rights will remain with Sky, now owned by Comcast, for the foreseeable future. Disney’s movies are also licensed to Sky: that deal expires this year, and the two companies are expected to announce a non-exclusive deal for Disney+ to be available on Sky’s platform.

As the streaming market becomes crowded, many expect weary viewers will reach “peak TV”. Analysts believe customers will settle on paying for perhaps five main services, more if some of the streaming services offer the option of being bundled, as Netflix does with Sky.

“As more and more competition emerges, there is certainly subscription fatigue setting in,” says Broughton. “Is Disney+ likely to make that core ‘must-watch’ group, whatever that number of subscriptions ends up being? I would say, ultimately, yes, they will.”


Mark Sweney

The GuardianTramp

Related Content

Article image
Disney’s stable of heroes dominates the big-screen galaxy
Investors criticised the studio’s deals with Pixar, Marvel and Lucasfilm, but the strategy has paid back 10 times over

Mark Sweney

22, Dec, 2019 @12:04 AM

Article image
The Disney empire strikes back at Netflix – but more rivals are set to enter the fray
Disney’s share price soared as customers signed up in their millions - but as costs rise, it will be a struggle for all players to survive in the crowded streaming universe

17, Nov, 2019 @7:30 AM

Article image
Disney superheroes join battle of the streaming services
Fans of the Marvel and Star Wars franchises will be a key audience in the media group’s challenge to Netflix

Shane Hickey

03, Feb, 2019 @7:00 AM

Article image
Netflix will need its comic-book heroes: Disney may just have become a rival
Just as the streaming service acquired its own suite of cartoon characters, the entertainment giant announced plans to join the pay-TV business

Mark Sweney

13, Aug, 2017 @6:00 AM

Article image
Disney prepares to strike back at Netflix
Streaming service Disney+, launching in the US in autumn, is gambling billions on being able to see off a rival that already has 150 million subscribers worldwide

Mark Sweney

13, Apr, 2019 @3:00 PM

Article image
Second Covid wave will boost all streamers but Netflix may yet reign supreme
Despite competition from rivals, many think the ‘king of content’ will report healthy rates of new subscribers this week

Mark Sweney

17, Oct, 2020 @11:05 PM

Article image
If Netflix decided to show ads, revenues really might start streaming in
The company is pushing through a price rise as new rivals prepare to launch. But it could always fund itself another way

02, Jun, 2019 @6:00 AM

Article image
As government flounders, investors find a way to curb executive pay
An unlikely hero – the Investment Association – is wading into pension inequality with a simple, compelling proposition

24, Mar, 2019 @7:00 AM

Article image
Disney forecast to steal Netflix’s crown as world’s biggest streaming firm
On back of Disney+ service launched in 2019, company predicted to be No 1 by 2024

Mark Sweney

14, Mar, 2021 @3:15 PM

Article image
As cinemas go dark, the film industry may go straight to Netflix
Studios look ready to rush out movies online during the pandemic – but can the big blockbusters afford to?

Mark Sweney

22, Mar, 2020 @12:05 AM