Netflix shares dropped 4.75 per cent Friday after Disney announced its streaming service would cost US$6.99 per month. Netflix currently charges between US$8.99 and US$15.99 per month. Disney’s stock price jumped on the announcement, rising 11.68 per cent by Friday close. (Time)
Talking point: Disney’s soaring stock price comes despite the company’s decision to cannibalize a number of other revenue streams to boost its streaming service. It’s set to launch in the U.S. in November, followed by a global rollout. Disney said it will bundle ESPN+ and Hulu into the new service, and its big-budget films will be exclusively available on its streaming service after their theatre runs. Disney’s big advantage is the sheer amount of content it owns compared to Netflix. It’s also willing to take a loss until at least 2024, which could kick off a pricing war that hurts Netflix’s bottom line as it tries to compete.