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Disney to Offer Streaming Bundle of Disney Plus, ESPN Plus and Hulu for $12.99

Disney disclosed Tuesday that it will offer a streaming bundle of Disney Plus, ESPN Plus and the advertising-supported version of Hulu for $12.99 a month.

The bundle of Disney direct-to-consumer properties will be available for purchase on Nov. 12, the day that the ambitious Disney Plus service is set to bow in the U.S.

Disney chief Bob Iger revealed the plan for the bundle during Disney’s quarterly earnings call with Wall Street analysts. Disney’s fiscal second quarter numbers came in below expectations, a shortfall Disney chalked up to lower than expected performances by key divisions of 21st Century Fox, which Disney formally acquired in March.

“Nothing is more important to us than getting this right,” Iger said of Disney’s aggressive move into direct-to-consumer streaming.

Iger also disclosed that Disney is in talks with Apple, Amazon and Google to distribute Disney Plus and presumably the newly disclosed bundle on their platforms. “We think it’s important to achieve scale relatively quickly and they’ll be an important part of that.”

Iger said consumer marketing for Disney Plus will start to emerge later this month. On the tech side, the Disney Plus team is devoting considerable energy to making it easy for prospective subscribers to sign up. “We know how important it is to create a friction-less experience,” he said.

Disney’s investment in its budding streaming services is only growing. Disney chief financial officer Christine McCarthy told analysts that the company’s Direct-to-Consumer and International divisions are projecting an operating loss of $900 million in the fiscal fourth quarter, up from $553 million loss in Q3 and up from a loss of about $370 million in fiscal Q4 2018.

The Hulu venture is now entirely on Disney’s books, which contributed to Disney’s widening loss in Direct to Consumer and International. Iger said Hulu’s subscriber base stands at 28 million. The Hulu Live digital MVPD service grew faster than any of its digital rivals in the quarter, McCarthy said.

In discussing the Q3 results, Iger emphasized the complexity of the 21st Century Fox integration and the need to invest as Disney makes significant shifts in its business priorities as it bets on streaming as the future of content distribution. Despite disappointing numbers from 21st Century Fox legacy units, including the Star TV satellite platform in India, Iger stressed that the company remains bullish on the $71.3 billion Fox deal.

“Our appreciation of the long-term value that we can create has increased,” Iger said.

Disney Plus will launch with more than 300 movie titles on day one, growing to 400 by the end of its first year. The tall includes eight “Star Wars” pics, four from Marvel plus eight more by the end of year one, 18 Pixar-produced features, 70 from the Disney animation vault and some 7,500 episodes of television. Iger said the Disney Plus originals are coming in strong. He’s watched the first season of “The Mandalorian,” the “Star Wars”-themed live-action series.

“I’ve been really impressed with the quality and the variety and the volume” of original production for Disney Plus, Iger said.

Iger also emphasized Disney’s flexibility with the content it creates. The FX team may produce an original series for Hulu that will have a second window down the road on FX.

Iger acknowledged that the company faces a “balancing act” in the near term as it weighs how much to invest in its new direct-to-consumer businesses and how much it needs to maintain its traditional linear TV operations including ABC, Freeform and FX.

“It is important for us to continue to fuel those channels with enough quality and original programming to support these businesses as they exist today,” Iger said. At the same time, “the pivot to direct to consumer businesses is designed not only to address the opportunity that exists in that space but also address the challenges that exist on the traditional side.”

Iger added that Disney is in the midst of “setting ourselves up in a way to be more resilient than any of our competitors should the traditional side erode so significantly that it is not as viable as it was.”

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