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Why Disney+ might actually be able to give Netflix a run for its money

By Trent Moore
Disney+ Getty

Netflix is the champion. Disney just became the number one contender.

Already a crowded market, the streaming entertainment industry is on the verge of becoming a virtual shopping mall of endless content, with big Hollywood brands (and their corporate masters) launching new platforms in an ever-escalating arms race. They'll all have their niche appeals and audiences, but right now, it looks like Disney's service may have what it takes to give Netflix its fiercest competition yet.

On Thursday, the Fox-fueled studio finally pulled back the curtain on its streaming play, Disney+, and it's clear the studio didn't come to play. We now have a breakdown of the shows, the movies, the price, and the date when we'll get to see all these Star Wars and Marvel projects on the horizon. Long story short, Disney+ will cost $6.99 per month, be commercial-free and go live November 12.

It'll feature Marvel Studios miniseries focused on characters like Hawkeye, Loki, Vision and Scarlet Witch, and Bucky and Falcon (plus animated and docuseries projects). It'll have multiple Star Wars originals, including Jon Favreau's buzzy live-action series The Mandalorian on launch day, plus a spy thriller following Diego Luna's Cassian Andor and Alan Tudyk's K-2SO. It will have original Pixar projects, led by a Monsters, Inc. sequel. It'll have nostalgia bait galore, including new shows based on fan-favorite properties like The Mighty Ducks and The Sandlot.

Oh, and all that doesn't even touch on the deep catalog of existing IP on tap. It'll have older Disney movies galore, plus all those hit Star Wars and Marvel movies. Then there's the Fox factor, with Disney+ already set to be the exclusive streaming home of 30+ years of The Simpsons, and there's so much more Disney will almost certainly mine for its streaming catalog.

Sure, it'll likely never have the same quantity as a service like Netflix, which has beefed up its offerings with third-party content deals. But, it stands to reason Disney+ doesn't really need it. The company controls four of the biggest brands in entertainment, and it plans to fully leverage that power as the only place for fans of Marvel, Star Wars, Disney and Pixar to find that content. That makes for one hell of a cross-section of potential subscribers all its own, even without a stack of new originals on the way.

Disney could've easily just dipped its toe into streaming on little more than the strength of its back catalog and made a lot of money. Instead ,they've made a move to not just be another streaming service. The company is reportedly spending half a billion on developing originals, and is prepared to run Disney+ at losses in the billions while it invests over the next few years to build up revenue from a subscriber base. You don't do that unless you see this service as the future, or at least a major part of it.

Then, there's the strategy itself. Netflix built its base on acquired content, but has since shifted its focus into developing its own original content. That approach has obviously netted plenty of hits, from Stranger Things to Black Mirror (not to mention those recently-canceled Marvel joints), but Netflix has had to grow most of its franchises from scratch. To put it in baseball terms, Netflix has built its brand on hitting a bunch of quality singles. Disney is starting on third base, and it won't take much to get potential subscribers energized to drop a few bucks for the latest A-list Marvel adventure or Disney adaptation. No franchise-building required.

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Disney+ is being positioned as a major player from the jump, with a launch unlike pretty much anything we've actually seen since streaming became the main way we watch TV. Looking back, Netflix's dominance started as a slow burn, slowly growing one original series or content deal at a time, spread out over years and years. Netflix starting streaming more than a decade ago, and dropped its first original series seven years ago.

Amazon Prime kicked around a few different iterations for almost as long, and didn't start experimenting in originals until 2013. As for Hulu, it launched in 2007 largely as a distributor for network shows, but didn't really get serious about original programming until the last few years. Of course, Disney now owns a controlling stake in Hulu after buying out Fox, so it doesn't exactly count as a "competitor" anymore.

Put simply, those Big Three streaming services have been around for about a decade, and no service launched since has had the force of will to break through to that level. Everything from DC Universe, to CBS All Access, to Shudder and HBO Now are all out there carving out smaller pieces of the pie. But, none of them have the clout to challenge for the 140+ million subscribers that Netflix commands. For the sake of comparison, Hulu is a solid success with 30 million subscribers; while Amazon's numbers are a bit more nebulous, given that Prime Video is bundled with Prime shopping. CBS All Access is at around 8 million, and HBO GO has around 5 million users.

All those services have managed to reach those levels without the full weight of Luke Skywalker, Iron Man, Buzz Lightyear and Mickey Mouse pushing wind into their sails. Imagine what Disney can do with all those properties, plus animated classics that have spent half a century buried in Walt's vault? Early projections say Disney could crack 5 million subscribers within the first several months of launching, with sights set on hitting 50 million paid users within five years. Considering what'll be on tap, those numbers don't sound all that far-fetched.

The writing has been on the wall for years, but streaming is the future of television. Disney sees it — and pretty much everyone else does, too. Streaming has already reached a tipping point where it's becoming more popular than cable or satellite linear television, and with live TV ratings on a near-unstoppable decline for years, that doesn't look to change. Companies ranging from Apple to Comcast (which owns SYFY's parent company, NBCUniversal) are gearing up to enter the fray in their own ways, and yes, those massive companies obviously have the juice to make waves. But, they're all coming into a crowded space that's only getting more crowded with Disney putting up its shingle. There's probably room for all of them to find some slivers of success, but it stands to reason people aren't actually going to pay for a dozen (or likely even a half-dozen) streaming services.

To reach the peak, any new service will have to catch or surpass what the Big Three have done up to this point. Everyone's playing catch-up, but Disney is the only one I'd bet on to start the race so late and still actually earn a medal by the time it's all said and done. There's no doubt Disney+ is going to be big, but there's every chance it could easily be huge.

Give it a few years, and we could be talking about how Disney+ has surpassed everyone except Netflix — and at that point — it'd be hard to doubt the Mouse House could eventually catch the OG streaming service, too.

And who knows, maybe eventually even pass it.