By Erich Schwartzel
ANAHEIM, Calif. -- Jolie Ninness is a mega Disney fan -- and
Netflix Inc.'s worst nightmare.
The 29-year-old medical-office employee from San Diego came to
D23, an annual gathering of Walt Disney Co.'s most ardent fans, and
quickly signed up for a three-year subscription to Disney+, the
company's forthcoming streaming service. Once it debuts in
November, she plans to cancel her Netflix subscription and instead
opt for the classic Disney titles and "Simpsons" episodes available
on Disney+.
Ms. Ninness was one of hundreds of consumers to sign up for the
three-year deal, priced at around $141, at the last D23 convention
before Disney+ launches. If enough consumers like Ms. Ninness are
on board when the service premieres, it could signal that Disney
can go head-to-head with entrenched competitors like Netflix and
Amazon.com Inc.'s Prime Video.
Disney's high-profile -- and costly -- attempt to compete in the
streaming ecosystem was center stage at D23, where a slew of new
shows and movies for the service was announced. Disney has an
arguably unmatched ability to cross-promote its top priorities,
whether at fan events like D23, at its theme parks or on its ABC
network. But to attract a core base of subscribers, the company is
offering subscription deals that come out to more than 70% off the
cost of Netflix.
The three-year offer, currently only available to those
attending the convention, will be open to any D23 club member
starting in September.
In a sign of D23's importance to the company, the presentation
occupied the largest hall at the Anaheim convention center and was
kicked off by Kevin Mayer, a longtime Disney executive in charge of
its streaming efforts who is seen by analysts and company insiders
as a potential successor to Chief Executive Robert Iger.
The Disney+ library will include programming from established
franchise engines like Marvel Studios and Lucasfilm Ltd., but the
D23 presentation made it clear Disney also wants to compete with
Netflix in reality shows and nonfiction programming.
"We have the brands that matter most," said Mr. Mayer.
Netflix declined to comment.
At kiosks on the D23 convention floor, fans lined up to enter
credit-card information and sign up for a three-year subscription,
a commitment that also grants them access to the "Disney+ Founders
Circle."
The D23 offer is about 33% off the usual price for three years
of Disney+, but what Disney loses in revenue it may make up for in
enthusiasm on Wall Street.
Disney is competing with Netflix, which already has more than
150 million subscribers, and Amazon Prime, which has more than 100
million. Investors want to see proof that Disney can quickly build
up a subscriber base that puts it on par with those services.
At an event for investors earlier this year, Disney said it
expects to have between 60 million and 90 million subscribers by
the end of fiscal 2024, at which point it should achieve
profitability.
One woman signed up for Disney+ at D23 to give her grandchildren
something to watch. Another fan picked up the three-year deal
because he noticed his favorite Marvel Studios movies were slowly
disappearing from Netflix.
In addition to the library of older Disney titles, the company
is producing new shows and movies exclusively for Disney+. Some of
the marquee shows include a "High School Musical" series and "The
Mandalorian," a new Star Wars story.
If the reaction of Disney fans at the convention was any
indication, the programming strategy was working. The announcement
that Ewan McGregor would be reprising his role as a young Obi-Wan
Kenobi in another new Star Wars series prompted cheers. News that
Hillary Duff would be playing Lizzie McGuire again in a reboot of
the eponymous series caused one young woman in the audience to
hyperventilate and say, "I can't believe this is happening."
Of course, at D23 Disney was playing to the faithful. The
broader marketplace brings a slew of challenges, especially as
households weigh how many streaming services are sufficient. So
far, Disney's inexpensive price point- -- $6.99 a month without any
discount -- is considered a major advantage. Earlier this month,
Disney announced it would bundle its other streaming services,
ESPN+ and Hulu, for a monthly fee of $12.99, or the cost of a
Netflix subscription.
Disney is leaning especially hard on its Marvel Studios, best
known for theatrical blockbusters like "Avengers: Endgame," to draw
in subscribers. Marvel is producing eight superhero shows for the
service that will complement its film slate.
At D23, Marvel Studios head Kevin Feige announced three shows
for the service, all mining the comic-book vault for new characters
like a Muslim-Pakistani teenager known as Ms. Marvel, and She-Hulk,
a female version of the ferocious green beast.
"She's a Hulk. She's a lawyer," Mr. Feige explained.
A slate of nonfiction, documentary-style shows, including one
about working at Disney, will be on the service, as well as reality
shows like a cooking competition called "Be Our Chef" and
"Encore!," which follows groups of adults as they restage the
high-school musicals of their youth.
But for many fans at D23, the appeal of Disney+ was getting more
of what they know.
Irene Rocha, a 39-year-old executive assistant from Carson,
Calif., paid for three years of the service to keep watching the
Marvel Studios and Star Wars movies that will soon be exclusive to
it. She'll add the cost to a streaming bundle she's fashioned for
herself that includes Hulu, Netflix and Amazon Prime. New Disney+
programming like "The Mandalorian" is driving her to subscribe, but
so is the classic library of older titles like the animated "Lion
King" that will be available anytime.
"I don't need to bust out my old VHS tapes," said Ms. Rocha.
(END) Dow Jones Newswires
August 24, 2019 18:18 ET (22:18 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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