Home Analysis IHS Markit: Disney+ to lead the pack of new ‘streaming heavyweights’

IHS Markit: Disney+ to lead the pack of new ‘streaming heavyweights’

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The number of online video subscriptions in the US will near the 300 million mark by the end of 2023 thanks to the entrance of major new players Disney, WarnerMedia and Apple.

This is according to IHS Markit research director, Ted Hall, who told attendees of the Videoscape Europe conference in London yesterday that the next generation of “streaming heavyweights” are tracking to increase US online video subscriptions by 15% above IHS’s baseline forecast.

“Although Netflix and Amazon will remain the single most popular online channels, the new entrants’ broader offerings will boost their overall market power,” said Hall.

“At Disney, if we stack up all of its online subscription services across Hulu, Hulu Live TV, ESPN+ and Disney+, its total subscriptions will actually, in this context, rival Netflix’s subscriptions total by 2023.”

Hall described Disney+ as “arguably the most highly-anticipated of the new direct-to-consumer services” and predicted that it has a “good chance” of achieving up to 20 million subscriptions by 2023.

Due to launch in November, Disney+ will draw from a strong catalogue of Disney, Pixar, Marvel, Star Wars, National Geographic and Fox content and at price of US$6.99 per-month will also undercut Netflix.

WarnerMedia’s forthcoming SVOD offering, on the other hand, was characterised as a service that “seems to be in the process of finding its identity,” with Hall pointing to recent executive comments suggesting it will be a single-tier offering that won’t undercut WarerMedia’s existing HBO Now service.

“We may be looking at a price-point for this service of somewhere between US$16 and US$18 per-month, so a fair bit above the services that we thought it would be competing with. There’s also talk that it’s leaning more towards having virtual pay TV ambitions,” said Hall.

He claimed that a “fatter bundle” approach makes sense for WarnerMedia’s parent company, AT&T, which has more to lose from pay TV’s decline than Disney does. However, it does also have a large mobile base that it could leverage as part of a future bundling strategy.

Apple TV+, which is due to launch this autumn but still hasn’t had pricing confirmed, is “trending towards our least aggressive forecast scenario,” said Hall. “Were it to be bundled with Apple Music, this would change the outlook significantly.”

“For Apple TV+ it will be brand equity and bankable talent that are the key weapons for attracting subscribers to its long-awaited TV content offering.”

Summing up, Hall predicted that varying levels of aggression will yield mixed results for these new streaming players in what is becoming an “exceptionally competitive online channels market”.

“High-quality content won’t be enough to guarantee success – the number of players that have it is increasing, forcing consumers to make tough choices. Bundling and hybrid models give the major players an edge, whether it’s aggregating online channels or aggregating a wider range of content and services.”

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