Disney finally announced that its streaming service Disney+ will launch November 12 and for just $6.99 a month — but it’s probably too late.
This is a huge capitulation on Disney’s part to the reality of the streaming world and the coming death of cable and satellite subscription television (for purposes of simplicity let’s just call this “cable TV”).
Through its various television networks: ABC, ESPN, the Disney Channel, National Geographic, all four newly acquired FX channels — just to name a few, Disney makes a vast fortune through cable TV’s carriage fees (which you pay. And there are some 80 or 90 million homes paying that monthly fee for some or all of those channels.
You see, even if you never watch certain channels on your cable TV package, Disney still picks your pocket every month. In other words, if Disney’s ESPN is part of your TV package, even if you never watch ESPN, even if you hate ESPN, you still subsidize ESPN to the tune of $85 to $95 a year. Now multiply that $85 to $95 a year times 80 to 90 million subscribers and you can begin to understand just how lucrative the cable TV racket is, especially for the big boys like Disney.
Which is why Disney+ is a massive surrender on Disney’s part, but it still might be too late.
Over the last decade, while Netflix and Amazon Prime conquered the world with their respective streaming services, dinosaurs like Disney wanted no part of it, and for good reason.
The more content available via streaming, the more incentive people have to cancel their cable TV packages, but now, after ten years in denial…
Disney+ is offering one more incentive to kill the golden goose of cable TV.
What Disney and others were hoping, though, was that if they made their content exclusive to cable TV, people would refuse to give up their cable TV packages and the golden goose would live on forever.
Well, that has not happened. Despite all the expert predictions to the contrary, despite all the ignorant wishcasting, cord-cutting (the canceling of cable TV) is accelerating; nearly three million households cut the cord last year.
And why not?
Cable TV sucks.
On top of being insanely expensive (the average bill is now around $100 a month), you are battered with 20 minutes of commercials every hour, when…
For about $13 a month you can subscribe to a streaming service with no commercials. An additional free option is a onetime outlay for a TV antenna that can pick up your local channels (how many available channels depends on where you live).
In this day and age, subscribing to cable TV is nuts.
But Disney and the other big boys held out, even as Netflix picked up 61 million U.S. subscribers; even as Amazon Prime earned more than 100 million U.S. subscribers; even as the idiot experts and their idiotic predictions about the end of the cord-cutting craze proved to be exactly wrong.
So Disney has surrendered, and not just to the reality of streaming but to the price point. Coming in with $6.99 monthly fee is a major concession.
How low is $6.99?
The carriage fee for ESPN is $7 to $8 per month, so anyone who cancels their cable TV package because they can now get Disney programming through Disney+ — well, Disney is losing something per month on the ESPN carriage fee alone. Add up the other carriage fee losses for all those other Disney-owned channels and over the course of a year you’re talking serious money.
Oh, and Disney has already launched an ESPN streaming service, ESPN+, which is available for just $4.99 a month, which is substantially lower than that $7 – $8 monthly carriage fee.
For all kinds of good reasons, you might hate Netflix or Amazon or Hulu (which Disney now has a majority stake in), but at least they live or die on merit, on willing customers, and not on the rigged swindle that is cable TV, a con game that basically works as an affirmative action program for left-wing networks like CNN that no one watches, a racket that forces you to pay for content you don’t want.
Streaming is the future. I’ve been telling you that for nearly a decade. Disney, however, is only now catching up and is so far behind it’s hard to believe.
Disney can only hope that to meet its goal of signing up 12 million subscribers over the next five years.
But if the trends hold, over those same five years a lot more than 12 million will cut the cord.
Follow John Nolte on Twitter @NolteNC. Follow his Facebook Page here.
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