Tech

Disney's $6.99-per-month streaming immediately makes it a value winner over Netflix for families

Key Points
  • Disney announces at investor day that it will charge $6.99 per month for Disney+ and $69.99 for an annual subscription.
  • Disney's $6.99 price comes as Netflix announced plans to raise monthly prices on its most popular plan from $11 to $13.
  • Disney+ will include a boatload of family content, including Disney's back catalog of movies, "Star Wars" films, Marvel movies and 30 seasons of "The Simpsons."
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Disney shares surge after unveiling streaming service details — Here's what six experts say investors should watch

For Disney, the price is the story.

Disney announced pricing for its new streaming service on Thursday, and it's surprisingly low: $6.99 per month and $69.99 annually (or $5.83 per month). The service won't include any advertisements.

That's the headline from Disney's big launch of its new entertainment streaming service, Disney+, which goes live to the world on Nov. 12.

That's a lot cheaper than Netflix, which announced earlier this year it was raising prices on its standard plan from $11 to $13 per month.

Disney CEO Bob Iger has already said Disney+ is the company's top priority. At the company's investor day on Thursday, Disney clarified that vision: Disney+ is kids' content.

Think about what isn't included in Disney+. There are no sports. That's for ESPN and ESPN+. There's no news or prime-time television from ABC. Other than National Geographic, the content is pretty straightforward. It's for young people. (OK, and some "Star Wars" movies and "Simpsons" episodes for Gen X parents who want to watch with or without their kids).

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"If consumers want sports, they can subscribe to ESPN+. If they want adult content, they can subscribe to Hulu, and if they want family, there's Disney(+)," Iger said.

Disney+ will immediately include 18 of Pixar's 21 movies, most Marvel films, 30 seasons of "Simpsons" episodes (thanks to the Fox acquisition!), the Disney movie back catalog ("Bambi," "Snow White," "Lion King," etc.), recent Disney movies ("Moana," "Frozen," etc.), 5,000 episodes of Disney Channel shows and 100 Disney Channel original movies, and a lot more.

Disney is building Disney+ to be the premium streaming option for kids and families. And it probably already is. While Netflix has spent heavily on kids programming, investing in its own animation division, its TV and movie options for kids are rather weak. Viacom's Nickelodeon and Disney have dominated kids shows for years. Netflix also doesn't own rights to a lot of popular PBS kids programming, like "Sesame Street" and "Daniel Tiger."

Amazon Prime Video has a decent array of children's show but can't compete with Disney's original slate, built up over decades. And Disney's new movies, including films like "Frozen 2" and the "Lion King" live-action remake, will become a part of Disney+ about seven to nine months after they hit theaters.

For $6 or $7 per month, Disney+ is an immediately appealing option for families looking for affordable content. The aggressive underpricing of Netflix is no accident. Disney is banking on getting 60 million to 90 million Disney+ subscribers by 2024. Iger said the pricing was purposefully set to appeal to as many people as possible.

"We're designing a product that we want to be accessible to as many consumers as possible," Iger said during the investor day presentation. "We just feel that Disney is loved by so many millions and millions of people around the world."

There are many streaming products now. Probably too many. But Disney+ may have instantly become the most appealing from a price-to-value standpoint.

Disclosure: Comcast, which owns CNBC parent NBCUniversal, is a co-owner of Hulu.