Will Disney Plus break through or break up crowded streaming market?

Will Disney Plus break through or break up crowded streaming market? Will Disney Plus break through or break up crowded streaming market?

November 12, 20192 min read

New streaming service Disney Plus launched Tuesday morning, joining other popular platforms such as Netflix, Amazon Prime and Hulu. John Healey, assistant professor of marketing at A.B. Freeman School of Business at Tulane University, says the way viewers are watching shows and movies is changing.


“I think the increase in streaming services may result in consumers spending just as much (or even, in extreme circumstances, slightly more) than they paid with cable. However, consumers will receive much more personalized services with access to more niche content.”


“For Netflix, the effect is difficult to predict because there are two competing effects. The increase in competition could hurt Netflix if people unsubscribe from Netflix with the addition of this new competitor. However, the Disney Plus service might encourage more people to become "cord cutters," which might make them more likely to subscribe to Netflix to gain access to content not available on Disney Plus.”


“The effect on cable companies is more simple and likely negative. First, it will make Disney less dependent on cable companies to distribute their content. This will increase Disney's relative power in negotiations with cable companies to carry their channels, likely increasing the cable company's cost. Second, Disney Plus decreases the value of cable to end consumers, meaning that they won't be able to raise prices to account for this increase in costs without losing more customers.”

"Streaming services in general are probably bad for movie theaters. ‘Bird Box’ served as proof that streaming services could be a viable distribution channel for mid-budget movies. However, Disney Plus is more complicated because of the potential synergies that could have a positive effect on their blockbuster properties. For example, one of their launch titles is ‘The Mandalorian,’ which is set in the Star Wars universe. This show could have an effect of generating additional buzz and excitement about Star Wars prior to the release of Episode IX next month."


To interview John Healey, contact pr@tulane.edu or Carolyn Scofield at (407) 342-8809.

Spotlight By Tulane University

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