Stan Facing Triple Wammy After Disney + OZ Plans Revealed
The loss making Nine Entertainment streaming platform Stan is facing a triple barrel problem after the Walt Disney Company rolled out their plans for their Disney+ service in the Australian market at the weekend.
As part of Nine Entertainment results last week, Stan posted an earnings loss of $21.3 million as costs jumped 23 per cent to $178.4m.
They did however book a first profit of $500,000 in the second half of the year as revenues climbed 62 per cent to $157.1m.
But this could be the best they get weeks out from the launch of Disney who are set to launch a massive competitor that will cost $8.99 a month or $89.99 a year, Stan is currently priced at $10 a month.Disney+ will supportfour simultaneous 4K streams all for the base price of $8.99 a month. Subscribers will also be able to create and manage up to seven profiles on a single account.
On top of this they face losing both Disney and content from the CBS/Viacom the owners of the Ten network.
Analysts are tipping that Australian consumers will flock to Disney deserting both Netflix and Stan.
Least affected could be Foxtel due to their sports content.
Asked by The Australian if he knew when the Disney content would be removed from Stan, chief executive Mike Sneesby said: “We haven’t made any comments in market around the commercial terms of the deal, no.”
At a major D23 event in the USA at the weekend, it was confirmed that Disney+ will launch on November 12 in the USA and a week later in Australia. The Company unveiled an aggressive plan to penetrate Australia with its streaming service, including a local hiring spree, bespoke content and a wave of original Star Wars, Marvel and Pixar series.
Within the first year, the service will host 7,000-plus episodes of television series and 400 to 500 movies.
First and foremost, among the content will be a variety of projects tied to Disney’s Marvel, Star Wars, Pixar, and Disney-specific properties, with an emphasis on a family-friendly theme.
The latest additions to the programming line-up include a set of movie franchise revivals and a third live-action Star Wars show which has already exited Star War fans.
Last week Stan announced a content deal with Paramount, which is understood to be worth $30m-$35m over three years.
But this may not be enough to fight off a surging Disney+.
Stan claims to have 1.7 million subscribers however Disney+ executives are tipping 2M subscribers in the first 18 months which is similar to what Netflix achieved in Australia when they launched.
Chairman of Direct-to-Consumer & the International division of The Walt Disney Company is Kevin Mayer has said that Australia is a “key market” for the Disney Company.
“Our content is very popular there, obviously English speaking, the broadband environment is great, SVOD (subscription video on demand) services are making headway there [such as] Stan and Netflix, so I think it’s a great market to launch,” Mr Mayer said.
Among the most popular content to be rollout will be Star Wars, Marvel, Pixar and National Geographic, which was acquired in the $105.29 billion of Rupert Murdoch’s 21st Century Fox in March.
This deal added the likes of The Simpsons, Avatar and X-Men, despite the deal dragging down its third-quarter revenue of $US20.25 billion a fortnight ago.
Disney CEO Bob Iger said that Disney+ will “transforming the company”.
Mr Iger told the D23 expo the Fox deal and Disney+ was part of his plan to “completely reorganise and reposition the company for the future” with hopes of hitting between 60 million and 90 million subscribers for the streaming service by 2024.
Netflix has passed 150 million subscribers but suffered a hit after recently missing its forecast for new subscribers while the total SVOD market in Australia has passed 12 million, up 29 per cent from a year ago.
Some observers claim the Walt Disney Company will need to absorb “five years of grinding and significant losses” before possibly emerging in a fairytales ending.