The Walt Disney Co. said that its upcoming Disney+ streaming service will be advertising free when it launches on Nov. 12.
The price is being set at $6.99 a month and $69.99 a year, undercutting Netflix, the leading streaming service that Disney is looking to compete with.
The company said it expects to have between 60 million and 90 million subscribers worldwide, with one-third of those subscribers coming from the U.S. with the rest in international markets.
With cash spending of more than $1 billion on original content planned for 2020, rising to the mid-$2 billion range, Disney+ will have operational losses. It is expected to turn profitable in 2024, said Disney CFO Christine McCarthy.
Disney+ will feature content from National Geographic Channel, one of the businesses acquired when Disney bought 21st Century Fox assets for $71 billion.
The service will also be the exclusive streaming home of The Simpsons, the long-running Fox Broadcast series.
Disney on Thursday held an investor day on a sound stage at its Burbank studios to lay out its direct to consumer strategy which, in addition to Disney+, includes Hulu (Disney now owns 60% of the streaming service), ESPN+ and Hotstar in India.
Those products are being offered separately for now, but a lower priced bundle featuring all of the products is likely to be introduced in the near future, executives said.
Disney CEO Bob Iger said the presentation, kicked off with a 15 minute video showing the breadth of Disney’s content, was designed to give investors “a strong sense of what we can do and what we’re building from.”
While Iger said the entertainment industry was going through a challenging time, with an extraordinary pace of change, deciding on a strategy to deal with it was not difficult.
“The best approach was to focus on … creating great content and distributing it in innovative ways," he said. "It’s that simple.”
Iger said that strategy would enable the 96-year-old company to “thrive and grow and be more relevant than ever as we enter our second century.”
Kevin Mayer, who is in charge of Disney’s Direct-to-Consumer and International Division, noted that the explosive growth in the number of people with connectivity to stream high-quality video was leading to a 37% increase in video subscriptions.
Content consumption was also going up at a 50% rate, expected to hit 1.2 billion hours per day in 2020.
While the streaming business is growing, it is also becoming more crowded, and in a crowded market, brands matter. “We have the brands that matter most to consumers when it comes to great entertainment,” he said.
Mayer said that Disney+ is “obviously a global product” that was expected to be rolled out everywhere.
ESPN+, which was launched a year ago, now has 2 million subscribers. Mayer said it could soon be launched in Latin America.
Mayer also said Disney was “actively evaluating” an international rollout for Hulu.