Details about Disney’s upcoming streaming service — especially the subscription price — sent the company’s stock price soaring in early trading today, with Variety reporting that shares were up more than 10% in morning trading while Netflix stock was down more than 3%.
The moves came after Disney announced Thursday that Disney+, which will launch in the U.S. on Nov. 12, will cost $6.99 a month — fairly close to half the price of a standard $13 Netflix plan.
“In fiscal 2020, the Mouse House will spend $1 billion in cash on original programming for Disney+, while it will have just under $1 billion in operating expenses, Disney CFO Christine McCarthy told analysts. Its spending on Disney+ originals is mapped out to rise to around $2.5 billion by 2024,” Variety reports.
The report notes that Disney is playing a “long game” — and Wall Street appears to approve.
Variety notes that Disney+, which will be fully subscription-supported, with no advertising, “is expected to sustain financial losses for its first four years of operation, before turning profitable by fiscal year 2024 (which starts in the calendar fourth quarter of 2023).”
Variety reports separately: “In the first year after its launch, Disney+ will include 7,500 episodes of current and off-air TV shows; 25 original series and 10 original movies and specials; 400 library movie titles; and 100 recent theatrical films release, according to Agnes Chu, senior VP of content, Disney+. That includes exclusive rights to all 30 seasons of ‘The Simpsons,’ which Disney obtained through the acquisition of 21st Century Fox. In year five of Disney+, the company expects to have an annual production slate of some 50 originals, Chu said.”