Disney Launching SVOD Service in U.K.21 Oct, 2015 By: Erik Gruenwedel
The Walt Disney Co. reportedly is set to launch a subscription streaming service next month in the United Kingdom that includes branded music, books, movies and TV shows. Dubbed “DisneyLife,” the £9.99 ($15.44) monthly platform represents the media giant’s first venture into the fee-based over-the-top video space.
“This is the future, in many respects,” Disney CEO Bob Iger told the Financial Times. “We’re seeing more and more opportunities to reach consumers directly and not through middlemen, and we’re seeing consumers wanting product in different ways.”
Disney intends to expand DisneyLife across Europe, in addition to updating content selections that would not initially include Marvel or Lucasfilm content. Iger said the service could be used as a blueprint for future branded Marvel and Star Wars OTT video platforms. Disney has no immediate plans to bow the service in the United States.
“The technology platform that this sits on is scalable to the U.S. and is scalable to our other brands,” Iger said.
Going direct-to-consumer with video is all the rage among U.S. media companies, including Disney, as a means of competing with SVOD pioneers Netflix, Amazon Prime Instant Video and Hulu (which Disney owns a stake in). The company last year launched Disney Movies Anywhere enabling consumers to buy digital titles stored in the cloud. It has been a longtime distributor of TV shows through iTunes.
Earlier this year, Disney licensed its flagship sports channel, ESPN, and Disney Channel to OTT services launched by Dish Network (Sling TV) and Charter (Spectrum TV Plus). It is currently suing Verizon over its use of ESPN as an add-on channel to the telecom’s “Custom TV” skinny bundle.
Speaking Aug. 4 on the Disney fiscal call, Igor reiterated his belief that the bundled channel pay-TV ecosystem represents the best consumer value, including access to ESPN. Despite citing data that claimed 83% of pay-TV households watch ESPN, the No. 1 sports network has increasingly come under scrutiny as it downsizes on-air talent and streamlines costs in the face of pay-TV subscriber cutbacks.
In addition, Iger said projections suggest the five-and-a-half hours a day people spend watching TV will increase to six hours due to OTT video. At the same time, he refused to concede that taking ESPN direct to the consumer via OTT and disrupting existing pay-TV agreements was a good idea.
“The multichannel universe … is still the dominant form of television viewing. It is clearly the dominate form for sports viewing as well,” Iger said. “When we look at that [MVPD] universe, we don’t really see dramatic declines over the next five years. We just don’t think it’s necessary [rolling out ESPN separately].”
At the same time, Iger said OTT video provides Disney with a lucrative distribution channel for off-network and original programming and movies.
“We look at Netflix as more friend than foe because they have become an aggressive customer of ours,” he said. “Products like Netflix are pretty attractive because they offer up user-friendly, efficient and often times much less expensive way to watch television.”