Planned March launch of Disney+ in the UK will evolve OTT market

Disney+

Disney+ is coming to the UK — and Western Europe — in March. Should other streamers be worried?

Yes… and no. It’s likely to cause some consternation as consumers rush to the new service, but it’s just part of the industry’s evolution.

Disney CEO Bob Iger, during the company’s earnings report this week, said its new streaming service would launch in the UK, Ireland and Western Europe in March, a plan that likely is causing hand wringing among rival execs across the pond.

The streaming service closed 2019 with more than 26.5 million subscribers and started this week at 28.6 million.

And, according to a new survey, Disney+ could disrupt the UK market, causing defections from existing services and making the market tighter for other streamers looking to launch there this year.

While just 2% of Netflix subscribers in the UK say they might leave to test the Disney+ offering, nearly 10% of Now TV subscribers and 7% of Prime Video users said they would consider leaving to test the Disney+ waters. And, there could be more. Iger said Disney planned to add local content to its international services and also said the Return of the Mandalorian – which was a huge hit in the US – would be following the launch with an October rollout.

Disney+ in the UK will be a core service

Goldmedia said its research showed nearly 7.6 million current streamers in the UK indicated they want to use Disney+ when it launches. In the UK — currently — 70% of consumers who stream average just two services and look to spend no more than £17 (US$22) a month on them.

But that may be as much a function of available premium content as anything else.

In the US, for example, the most developed OTT market in the world, recent studies show consumers willing to carry five, and potentially more, streaming services. Increasingly, they’re creating their own mini- and micro-bundles from a bevy of available services, including live sports.

As more premium content becomes available in the UK market – especially originals from established brands going over the top and existing start ups – it’s likely consumers will be willing to carry more services, even as cost rises.

Among users who currently stream, 59% have already heard about Disney+. About 35% of respondents who already use video on-demand indicated they would use the service when it launches.

But, nearly three-quarters (71%) of potential Disney+ customers want to subscribe to the service in addition to existing subscriptions. Less than one-third (29%) say they would cancel another service in order to pick up Disney+.

Iger said Disney+ was already looking to work with distribution partners in new markets – as it has in the US with Verizon, Apple and others. To that end, Disney+, as already has occurred with Netflix, will be integrated into the Sky Q platform, a potential buffer to churn.

The bottom line

The sky is NOT falling, but there’s no doubt providers already streaming in the UK will feel a little pinch along the edge of their margin.

Churn will increase. At first, because consumers will be trying out the new service and feel the need to trim their spending on other services.

But, in short notice, consumers in the UK will increase their service tolerance as they begin to craft their own bundles of streamed content.

Because, there is no saturation of the SVOD market… there just needs to be more premium content available. As that becomes the norm, as content owners turn more and more to streaming as a pillar of their business — as has Disney — consumers will adapt… and adopt.

Stay tuned.

Jim O’Neill is Principal Analyst at Brightcove. You can follow him on Twitter @JimONeillMedia and on LinkedIn