Virus Restrictions Seen Boosting Disney’s Europe Streaming Debut
Virus Restrictions Seen Boosting Disney’s Europe Streaming Debut
(Bloomberg) -- A global virus outbreak may not be the best time to launch a new product.
Unless, perhaps, you’re Walt Disney Co., and that product is a streaming service offering some of the best-loved brands in entertainment -- like “Star Wars,” the Marvel superheroes and “Toy Story” -- to people stuck at home. Disney+ is scheduled to launch on March 24 in Europe.
“Disney couldn’t have timed it any better to be honest,” said Paolo Pescatore, an analyst at PP Foresight. “It’s an opportune moment: You need to entertain the kids, and there’s hundreds of hours of content that brings the family together.”
Disney+ has been available in the U.S., Canada and the Netherlands since Nov. 12. Its arrival across Europe could impair efforts by Netflix Inc. to boost international subscriber growth as its American business starts to slow. The service will also intensify competition among local European broadcasters who are trying to launch their own streaming services, like ITV Plc’s BritBox and France’s Salto.
As the coronavirus pandemic forces more people in Europe to stay at home -- Italy is on a nationwide lock-down, some schools in Greece and Spain have closed, large gatherings in France and Germany have been canceled -- there will be increased demand for streaming services like Disney+ and Apple TV+, said Tim Mulligan, research director at MIDiA Research.
“Consumers will increasingly have free time as outdoor activities and socializing is minimized,” Mulligan said. “This will inevitably increase the likelihood of adoption.”
Disney+ will cost 5.99 pounds ($7.63) in the U.K. and 6.99 euros ($7.86) in Europe. It’s the company’s most important new business initiative in years, and has already attracted 28 million customers, including in Australia and New Zealand. According to Digital TV Research, the service will have about 25 million paying subscribers in western Europe by 2025, akin to the current number of subscribers to Comcast Corp.’s Sky.
As well as being available directly online, Disney has signed distribution deals with various European partners to help get the service in front of potential subscribers.
In Britain Disney+ will be available on Sky, and in France it has agreed an exclusive distribution agreement with Canal Plus. Telefonica SA’s Monetarist Plus will offer it in Spain, and Telecom Italia SpA will be the exclusive wholesale distributor in Italy.
Though the service might get a short-term boost from people being at home, subscribers could cancel once virus restrictions are lifted if the measures to contain its spread create a prolonged economic drag, said Richard Broughton, a research analyst at Ampere Analysis in London.
And, there’s also a risk that the marketing buildup ahead of the launch gets overshadowed by virus headlines. Disney has already canceled some promotional events for the launch due to the coronavirus.
“In a period where they might’ve got people to talk about it, the marketing could be more difficult,” Broughton said. “Visibility will be an issue.”
Still, with its strong library of content, Disney+ is likely to benefit as consumers reconsider how much they spend on traditional pay-TV packages, PP Foresight’s Pescatore said.
“There are too many services chasing too few dollars,” he said. “There’s going to be a lot of pay-TV shaving going on.”
To contact the reporter on this story: Joe Mayes in London at jmayes9@bloomberg.net
To contact the editors responsible for this story: Jennifer Ryan at jryan13@bloomberg.net, Thomas Pfeiffer
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