Disney CEO Bob Iger says it's a coincidence the Disney+ bundle costs the same as a Netflix subscription

Key Points
  • Disney's streaming service is set to launch this November with an option that bundles it with ESPN+ and Hulu for $12.99, the same price as a Netflix subscription.
  • "I know there's a lot that's been speculated about us going after them," Bob Iger tells CNBC.
  • He says the goal for Disney+ is to quickly get the number of subscribers as large as possible.
Disney announces streaming bundle to compete with Netflix

Disney is set to release its own streaming service, Disney+, on Nov. 12, and on the same day it will offer a deal bundling Disney+, ESPN+ and Hulu, the company announced on Tuesday.

The price for that three-piece bundle is $12.99 per month — the same price as a Netflix standard plan.

According to Disney CEO Bob Iger, the fact that the two companies landed on the same price is a coincidence.

"I know there's a lot that's been speculated about us going after them," Iger said in an interview with CNBC's Julia Boorstin. "We're not, we're looking to occupy space. That's a growth opportunity for the company and growth in terms in terms of consumption."

"We've always believed there's plenty of room for both of us to thrive in this marketplace," Iger continued.

Robert Iger, Chief Executive Officer of Disney, poses in "Star Wars: Galaxy's Edge" during a media preview event at Disneyland Park in Anaheim, California, May 29, 2019.
Mario Anzuoni | Reuters

Iger said the goal for launching the Disney+ service is to quickly get the number of subscribers as large as possible. On a call with analysts, he said $12.99 is "a good price."

"Basically, sign up as many subscribers as possible and get them into the service, and give them a chance to enjoy the great intellectual property and product that will be part of that service," Iger said.

"We thought this bundle was great step in achieving that goal."

If purchased separately, Disney+ costs $6.99 per month, Hulu costs $5.99 per month and ESPN+ costs $4.99 per month — that's $17.97 total. Netflix's basic service cost $8.99 a month.

Iger added that although the bundle may cost significantly less than if someone were to subscribe to all three services separately, there are hidden economic benefits to Disney because the Hulu subscription included in the bundle is ad supported, giving it another source of revenue.

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"If this bundle serves to grow Hulu subscribers more aggressively, that will be very valuable on the advertising side," Iger said.

The competition in the streaming service market is heating up. In addition to Disney and Netflix, Apple says its service will launch this fall, and NBCUniversal plans to launch a service in 2020 with an ad-free version that costs about $12 a month.

Disney is banking on the properties it owns, including Star Wars, Marvel and assets from 21st Century Fox to distinguish it from the rest of the pack.

"We think we're uniquely positioned because of the content, because of the brands," Iger said.

Disclosure: NBCUniversal is the parent company of CNBC.

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