Verizon to Offer Free Disney+ as Streaming Wars Heat Up -- 2nd Update
October 22 2019 - 7:13PM
Dow Jones News
By Sarah Krouse and Drew FitzGerald
Verizon Communications Inc. said it would give its wireless
customers on unlimited data plans a year of free access to Disney+,
giving the new streaming entrant a huge potential boost and the
cellphone carrier a fresh way to hold on to customers.
The video service from Walt Disney Co. includes films and TV
series from Pixar, Marvel, Star Wars and National Geographic, among
others. It will cost $6.99 a month when it launches on Nov. 12 and
goes up against Netflix Inc.
Verizon is the largest U.S. wireless provider with more than 100
million subscribers, and about half of its wireless customers are
on unlimited plans. In addition to such plans, free Disney+ also
will be available to Verizon's new Fios internet and 5G home
broadband customers.
Disney+ is one of several new video services looking to
challenge Netflix's dominance of the streaming market. Many Netflix
competitors will need to play catch-up to build their subscriber
rolls and are looking for ways to quickly grab customers as they
launch. Apple Inc. is giving its Apple TV+ service free for a year
to customers who purchase new iPhones.
UBS Group AG analysts estimate that there are about 17 million
Verizon wireless customer accounts eligible for the Disney+
offer.
Rival AT&T Inc. next week plans to unveil its own streaming
video service called HBO Max ahead of a full commercial launch
expected next year. The telecom company has spent months assembling
the service, which will include HBO's premium TV shows as well as
Warner Bros. films and popular reruns like "Friends." AT&T won
the rights to much of that content last year through its more than
$80 billion purchase of Time Warner, a business it renamed
WarnerMedia.
Under the latest agreement, Disney and Verizon will share the
cost of providing the content to the carrier's subscribers,
according to a person familiar with the arrangement. Disney
benefits from an immediate pool of viewers, while Verizon is able
to offer customers a perk that executives hope will keep them from
turning to other providers.
Wireless carriers are increasingly offering free streaming
content from Netflix to Spotify and Apple Music in a bid to retain
customers in the super saturated U.S. market. Their goal is to
reduce churn, or the number of customers who drop the service,
though some executives say it is still too early to know how
effective content offerings are in keeping subscribers from
switching to a rival.
T-Mobile US Inc. kicked off the streaming-perks trend in 2017
when it gave family-plan customers free Netflix service. Sprint
Corp., which is seeking to merge with T-Mobile, offers free Hulu
video streaming with its unlimited plans. AT&T gives some
unlimited wireless customers free access to its AT&T Watch TV,
a small bundle of live television channels.
Verizon has previously offered such perks. Customers on some
Verizon unlimited plans get Apple Music free for six months and the
carrier offers new home 5G customers a month of free YouTube
TV.
The company, which had 118.12 million wireless connections at
the end of the second quarter, owns some video content within its
Verizon Media Group, but has largely sat out the race to create and
own television and streaming video assets. It has tried instead to
partner with other companies that generate content.
In August, Verizon lowered prices on its unlimited plans by $5 a
month, an unusual discounting by the market leader after it lost
phone customers earlier in the year during a less-promotional
stretch. In its second quarter, Verizon added phone customers. The
carrier is scheduled to report third-quarter results Friday.
Write to Sarah Krouse at sarah.krouse@wsj.com and Drew
FitzGerald at andrew.fitzgerald@wsj.com
(END) Dow Jones Newswires
October 22, 2019 18:58 ET (22:58 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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