The $11.99 per month bundle of Disney+, ESPN+ and Hulu Basic not only represents a killer price point, it also jumpstarts the ad-supported model for OTT.
Bob Iger, president and CEO of the Walt Disney Company, delivers a keynote speech during the TelecomNEXT convention in Las Vegas on Monday, March 20, 2006. During yesterday’s investor call, Disney chief Bob Iger formally announced that the company will offer a bundle including ESPN+, Hulu and its new Disney+ streaming service for $12.99 per month once Disney+ debuts on November 12.
The bundle adds ESPN+, Disney’s fast-growing service for sports fans, that has already surpassed 2 million subscribers largely on the basis of its exclusive UFC content. The service also features hundreds of MLB, NHL and MSL games, PGA golf, Grand Slam tennis, college sports, international sports like rugby and cricket, plus sports-oriented specials. At $4.99/month or $49.
If that works out as planned, it would be a huge win and cement in place another big advantage for the Mouse. That’s because advertising not only opens up another source of revenue, it also provides Disney with a metric beyond subscriber growth. Advertising solves a few problems in this environment. It brings in outside dollars as a new source of revenue. It can subsidize the monthly subscription cost, making the “basic” service tier an attractive option for thrifty viewers while enhancing the perceived value of the premium ad-free tier. It also drives more transparency around the popularity of particular programs, since the costs of ad placement typically derive from viewership and demographics.
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