Disney+ is going to be playing a completely different game to its competitors

When Disney+ launches on November 19 it is not going to have to play the same game as its competitors.

Whilst Netflix and Stan will need to roll out an attractive slate of new programming in Q4 to spark new acquisition, as well as demonstrate depth of catalogue to retain existing, Disney+ will launch into market right in time for the Christmas and surrounds retail period, a single digit price point (annualised at $89) and a brand doesn’t need to demonstrate depth or the chops to bring new stories to the screen.

A few weeks ago I wrote about how I felt that it would be wise for Disney to acquire half of Stan in order to launch Hulu in this market – a belief I still hold. This tie up would also give Disney+ a bundling option to directly challenge Netflix, however Disney would retain 100% ownership of Disney+.

The pricing of Disney+ is very sharp – at $8.99 it’s the lowest price streaming service and has the widest potential audience.

Marketing wise its options are so exhaustive it has 4-5 years of terrains to explore. For Stan and Netflix their retention and acquisition machine is well tuned, but reliant on a few key levers. Disney+ has more tools at its disposal.

At launch around Christmas you have a significant gift buying cohort – from the organised to the last minute – who collectively are spending $20-24b on non-food or hospitality discretionary gifts for friends and family. Post Christmas to Jan 15 this figure is approximately $10b.

Disney+ is uniquely positioned to grab a slice of this as the service is applicable to most households and the annual price point is comfortably under $100. Giving the gift of Disney is both accessible and widely applicable.

This Christmas Disney+ is competing with retailers such as Target, KMart, Big W, Myer and David Jones. It's competing with Amazon, ebay. Hasbro and JB Hi Fi. It's competing with the BBL and Summer of Cricket. It might even be competing with AFL memberships.

Disney+ can also play in the $1b toy market, providing the gift of entertainment and trust.

It will compete with every movie title in 2020 and beyond – a $1.2b industry.

It can tap easily into the large rusted on fans of Marvel, Star Wars and Pixar – which between them have delivered billions of dollars of box office revenue in Australia over the years.

For the Christmas retail period there’s even the $2.5b gift card industry – which is effectively last minute gift buyers. The Disney brand brings a new level of safety for these consumers.

All this is available before it needs to directly target existing SVOD or pay TV subscribers – which it will also do when the need arises. But there’s no rush.

My feeling is Disney will want 1.5m paying Disney+ accounts by the end of 2020 and 5m accounts by the end of 2024. These numbers feel achievable and would make Disney+ in Australia a $400-450m entity (ex. GST) by 2024.

It would be reasonable to expect a Hulu like service to launch between now and the end of 2020, which could house a wider range of content and even potentially position itself as a content aggregator or ‘new cable’ proposition directly targeting Foxtel for both subscribers and advertisers. Hulu’s tiered subscriber model has been successful in the US, and an ad funded model in Australia at a $5 or $6 price point would be disruptive to both the pay TV industry and the current SVOD players.

It leaves Stan and Netflix in a tough situation but my belief is both should be able to co-exist with Disney+ in the immediate term. We will see with Stan come November-January if the Disney content currently on the platform is moved off. Stan would feel confident over the past 12 months they’ve done enough to show those they acquired via the Disney deal that there’s enough value in the service if that content was to move. This is based on the assumption that there’s headroom in Australian consumers attitude to pay for incremental streaming platforms – which recent history will suggest there is.