The Econ-versation: Disney Plus creates competition in the streaming service industry

Silvia Buonocore, Senior Writer

Last Tuesday, Disney debuted its new streaming service, Disney Plus, which includes Disney, Pixar and Marvel films, among others. Upon release, there were service outages wherein users received “unable to connect” messages, likely due to the high demand for the new service.

The Disney Plus streaming service, at $6.99 per month, is less than Netflix’s basic plan priced at $12.99 per month, bringing competition to Netflix and the streaming industry as a whole. Out of all the most popular streaming services, currently Apple TV Plus has the cheapest price at $4.99 a month.

Netflix dominates the streaming industry. According to Statista, the company finished quarter three with 158.33 million subscribers. Netflix also has the highest share of demand at 63.1 percent followed by Amazon Prime at 9.7 percent and Hulu at 7.9 percent.

The introduction of the new service not only brings competition to the streaming industry, but also to cable and satellite companies. As streaming becomes more popular, people continue to cancel their cable or satellite subscriptions and shift over to streaming services.

Disney Plus is also projected to remove Disney shows from Netflix. While this decision may incite more people to switch from Netflix to Disney Plus, Disney will then no longer receive payments from Netflix to keep their shows on the Netflix service.

A drawback of Disney Plus is that it is geared towards a younger audience, while the other streaming services provide content for a wider range of ages. Therefore, the movement of Disney shows to Disney Plus will likely only cause a specific group of people to switch their accounts to Disney Plus. However, people may subscribe to Disney Plus in addition to Netflix to extend the amount of content they can stream.

Future streaming services will be released in the spring of next year, such as NBCUniversal’s Peacock in April 2020 and HBO Max in May 2020 priced at $14.99 a month. The addition of these streaming services to the industry will likely bring more competition and transfers of shows from one service to another.

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