I wrote last month about how Apple's strategy to give a free year of Apple TV+ to anyone who buys an iPhone, iPad, or Mac was a brilliant move to eliminate any barriers to building a massive audience. Apparently Disney agrees, with the announcement that it is partnering with Verizon to offer a free year of Disney+ to that company's Unlimited plan customers.
Things are getting very interesting in the streaming wars, which just shows how seriously the big players are taking this battle. And make no mistake, the stakes are high for everyone involved. Netflix arguably has the most to lose, while Apple and Disney have the most to prove. Just yesterday I wrote that Apple could land a crushing blow to the competition by offering an all-inclusive subscription that bundled TV+ with its Music, Arcade, and other services.
Disney's latest move shows that it is absolutely playing for keeps and has no intention of letting Apple get an advantage as both launch streaming services next month. And while Disney may not have been the first competitor to come up with the idea of giving away a year for free, I still think it's an incredibly smart strategy. It also shows that the increasing pressure to build an audience could end up being very good for streaming customers as they compete for subscribers.
But, back to that incredibly smart strategy. Here's what I mean:
Disney already has what I'd argue is the most valuable content library by a long shot, with its massive collection of classic films, alongside Pixar and Marvel. Oh, and let's not forget that little franchise known as Star Wars.
Contrast that with Apple, which is relying entirely on original content at this point. Or Netflix, which still offers the largest overall library, but has had to move into creating original content in order to compete with producers like Disney that have started pulling content in favor of their own platforms.
Disney's content library means that it entered this battle with a huge advantage. In fact, I wrote this summer about a survey that indicated as many as 42 percent of consumers would sign up for Disney+, simply because the content reminds them of their childhood.
That's a huge deal, but I'm pretty sure Disney would like to give a reason for the other 58 percent of consumers to sign up as well.
The reality is that most consumers say they won't spend more than $33 a month, which means there's only so much room for competition. If you're already paying for Netflix, Hulu, or HBO Now, it eventually starts to add up. Consumers might decide to pass on one more subscription--unless that subscription is free.
That Disney is willing to offer a year for free shows two things: first that it doesn't need the cash, and two, that it's confident that once consumers sign up, they'll stick around even once it starts to cost them $6.99. That's a pretty reasonable bet considering consumers are much more likely to keep paying for something they already have than sign up for something new. Take the pain out of signing up, and you've created a magic formula for winning the long game.
Of course, magic is Disney's specialty after all.