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IPFS News Link • Entertainment: Television (TV)

Disney's New 'Netflix Killer' Won't Turn A Profit For At Least Five Years

• https://www.zerohedge.com

In a move that leverages its purchases of a suite of entertainment assets formerly owned by 21st Century Fox, as well as its purchase of the Star Wars franchise and other popular entertainment assets, Disney on Thursday unveiled its "Netflix killer" streaming service. And in keeping with the business model for Silicon Valley 'content' plays, Disney said that the service, which will be priced at just $7.99 a month, or an annual fee of $69.99, isn't expected to turn a profit for at least five years.

During what was described as an "Apple-style" product launch event, Disney introduced the new service Thursday on a sound stage used to make the original "Mary Poppins," delivering an Apple-style presentation of the online product, Bloomberg  reports.

Despite the company's promise that the service could be a perpetual lossmaker, investors embraced the news, sending Disney shares nearly 4% higher in a powerful vote of confidence. This isn't so hard to fathom, given Disney's strong content offerings, ranging from the entire catalogue of 'The Simpsons' (which it acquired in the Fox deal) as well as movies from Pixar studios, as well as its Marvel holdings. To try and entice customers, the service will be priced at roughly two-thirds the cost of Netflix's most popular plan.

"We are confident this is a product people are going to sign up in droves to have," CEO Bob Iger said during a Bloomberg Television interview with Emily Chang.

The service, called "Disney+" will launch in the US, western Europe and Asia on Nov. 19, before arriving in Eastern Europe and Latin America a year later. 

Now that it has ended its licensing deals with Netflix and other rivals, Disney+ expects to dump $1 billion into streaming programming over the next year. It doesn't expect to make a profit until 2024. It expects roughly two-thirds of those sales to be overseas.

In keeping with the 'Apple' approach to the unveiling, Disney introduced the service with a humorous video where characters from "the Simpsons" saluted their new corporate overlords, as a signed picture of Rupert Murdoch, the media mogul who controls Fox Corp and News Corp., and who sold all the Fox studio assets to Disney as part of the deal, languished in the trash. A banner reading "Welcome Synergy", a reference to the Fox acquisition, hung overhead.


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