U.S. operator Verizon has announced a deal with the Walt Disney Company to offer the forthcoming steaming video service Disney+ free for 12 months to Verizon customers.
Verizon mobile customers on an unlimited plan, new Fios Home Internet and 5G Home Internet customers will gain access to the entertainment service when it launches on 12 November.
Verizon has made similar offers in the past, such as a year of free Netflix for Fios customers, Apple Music included with its top unlimited plans and YouTube and AppleTV with its 5G home internet service. The operator said that it will be the exclusive wireless carrier for Disney+ its first 12 months. Verizon customers can activate the offer beginning on the launch date.
Offering discounted, free and/or exclusive access to streaming entertainment content has proved to be a sound strategy for mobile operators in many markets. In this particular case with Verizon and Disney, several pieces fall into place in a way that makes the deal especially strong.
What we are seeing here is the largest mobile operator in one of the most developed mobile markets announcing an exclusive free-access deal with one of the biggest media companies in the world. With Disney+, the Walt Disney Company is aiming to challenge Netflix and Amazon Prime Video in the OTT content wars. Launched in September in the Netherlands on a test basis, Disney+ combines content from a range of properties that Disney originated or has acquired—Walt Disney Studios, Walt Disney Television, 20th Century Fox, Marvel, National Geographic, Pixar and Star Wars. Up until this point, Disney has competed in the OTT space with Hulu and ESPN+.
Verizon’s offer is extremely persuasive, in that it will be presenting its customers with one-year exclusive free access to Disney+. That should significantly help the operator with customer acquisition and retention. It will also help upsell lower-echelon Verizon customers to unlimited mobile plans and to Fios fiber-optic and 5G home service. After the first 12 months, Verizon will then be able to derive revenue from many if not most of the Disney+ users by moving them from free to paid service. Disney+ is advertised at US $6.99 or US $69.99 a year.
As for Disney, the size and scope of Verizon stand to give its new streaming-video-on-demand service a large-scale and immediately accessible market.