Disney May Have Already Won Streaming Wars with New, Cheap Bundle

As if Disney+'s low, LOW price of $6.99 per month wasn't enough already, Disney upped the ante this week with a bold bundle proposition:

An impressive $12.99 per month all-in for Disney+ (ad-free), ESPN+ and Hulu (the latter two with ads).

For reference, ESPN+ is $4.99 per month, while Hulu is $5.99 per month with ads. Netflix, which does not feature ads, is $13 for its mid-tier HD service though as of this fall, it won't feature Disney-owned inventory. And it won't feature live sports either, as ESPN+ includes hundreds of games across college sports, MLB, NHL and more. So for the same price as Netflix, you're getting quite a bit more in the way of known inventory with the Disney bundle.... though where it could lack is with regard to unique programming, at least right away.

We recently wrote about how Marvel will utilize Disney+ to create unique shows with movie tie-ins that you can only find on the streaming platform. Of course, that's just one portion of Disney's audience, however. ESPN+'s live sports is another. And Hulu has some exclusive programming, but the rest is largely archival content, which will appeal to its own subsection of the bundle's audience.

But the biggest draw could potentially be the original programming and known Disney-owned films that are poised to be hosted on Disney+. Marvel and Star Wars are a significant part of that collection. Disney and Pixar make up an even larger chunk, and could wind up being the driving force behind early subscriptions, especially as Disney-owned properties keep disappearing from other streaming services.

Disney smartly used Netflix, in particular, to field test its streaming content with known platforms these past few years, and as a result, audiences were hooked on having that content available to them. As a fan of the Marvel films, I certainly liked having access to many of the movies in the franchise. Star Wars fans have felt similarly. And most of all, parents of younger children were relieved to have a large catalog of musically-inclined and distracting Disney films available to help occupy the days. From a behavioral standpoint, we've all been conditioned to expect that content to be available now. Once it's gone (and a bunch of it is already), your mind doesn't just forget about that expectation.

But in case it does, Disney's bundle should cure whatever hesitations you may have in subscribing. And as a result, it should be a major boost to Disney's bottomline -- something company CEO Bob Iger has already mentioned, claiming that the bundle could be the "most important thing he's ever done." By posing as a carrier in this case, they're taking the alternative route of discounting services, however, with the goal of growing the size of the audience they'll be able to advertise to on Hulu and ESPN+ (thus increasing the amount they can charge brands for that larger viewership).

Disney's uniquely positioned for this model given its massive list of properties including Disney, Marvel, Star Wars, 21st Century Fox, ESPN programming, plus major network shows old and new on Hulu, and as a result, may have already "won" the streaming wars before they've really begun in earnest. That doesn't mean the slew of services arriving in the next 18 months or so will fail, or that Netflix, Amazon, WarnerMedia or anyone else is now screwed.

More simply, Disney has an ability to act as MVPD and content provider on a level no one else can (AT&T's your closest competitor), and at a price point that no one else is going to be able to compete with, either. Beyond unforeseen acquisitions in the space, this sets Disney up to be the lead car right from the start of its streaming race, and potentially change the structure of the track they're driving on in real time, too. While everyone's been moving to unbundle content in recent years, Disney's done the exact opposite and it may be the move that leads us back to something more defined like the traditional cable package model always was.

While people like choice, they also like simplicity. And for the most part, Disney's been able to provide both here at a discount.