Verizon and Disney announced a promotional deal this morning which will give a free year of Disney+ to Verizon’s new and existing 4G LTE and 5G unlimited wireless subscribers and new Fios and 5G Home Internet subscribers. Some back of the envelope calculations show the promotion could quickly yield millions of new Disney Plus subscribers.
At the end of Q2 ’19, Verizon reported a total of around 94 million wireless retail connections. Verizon has been promoting new unlimited plans, and CFO Matt Ellis said on the Q2 ’19 earnings call that “less than 50% of our customer account base are on unlimited plans.” If say 35% are on unlimited, then around 33 million wireless subscribers would be currently eligible for the Disney+ free offer. If even 10% took advantage, that’s around 3 million new Disney+ subscribers.
But given the amount of promotion Disney will be doing, the 10% could be quite conservative. There’s also the limited plan subscribers who could now be tempted to move to an unlimited plan for the offer. And of course, the people who switch from another carrier to Verizon each quarter and could be more incented to do so with the Disney+ offer being dangled.
On the wired side, new Fios and 5G Home Internet subscribers are also eligible (note, not existing subscribers). This won’t be nearly as meaningful a contributor to Disney+ though. In the past 4 quarters, Verizon has only added around 175K total Fios Internet subscribers. Even if they all took the Disney+ offer on sign-up, it’s still just a small bump relative to the wireless opportunity.
While the Disney+ 12 month free offer is exclusive to Verizon, it’s highly likely Disney+ will have other deals with other carriers (and of course a temporary free trial will be available to everyone). Some of the Verizon subscribers may have otherwise paid to sign up for Disney+ so for them it’s a nice bonus.
The Verizon promotion also keeps pace with Apple’s promotion of a free year of its Apple TV+ service to new device owners. Both will increase pressure on incumbent SVOD services to provide more aggressive sign-up discounts. Disney continues to up the ante for all competitors in the streaming industry.