Following on from its sister brand in Spain, O2 has announced a partnership with Disney+ to become the official mobile distributor in the UK.
As Europe edges towards the launch of Disney+, the local partnerships are beginning to add up for the entertainment giant. Netflix has already proven this is an excellent go-to-market strategy when attempted to crack the international markets, and Walt Disney is seemingly making all the right moves to ensure its challenge to the content king has every opportunity to succeed.
“We’re delighted to work with the award-winning mobile network O2 on the UK launch of Disney+, which represents a new chapter in the way Disney delivers our timeless stories to fans,” said Jan Koeppen, President of The Walt Disney Company EMEA.
“We’re delighted to be working with Disney to bring these incredible shows and movies to our customers, demonstrating that there are more reasons than ever to join the UK’s No.1 network,” said Mark Evans, CEO of O2.
Although Disney and Netflix are being positioned as rivals, what is worth noting is that the two will co-exist. Disney programming is not relevant to all of Netflix customer base, and vice-versa. There is of course cross-over, and Disney will erode some of the vast Netflix subscription list, there are of numerous customers who will take both services, or perhaps completely ignore Disney as a proposition.
Launching on March 24, the O2 partnership adds to the existing tie-up with Sky. In both of these partnerships, Disney+ customers will be able to integrate payments for the streaming service into existing bills, leaning on the trust which has already been established with O2 and Sky. Existing O2 customers will also be entitled to a £2 a month discount on connectivity bills as a reward for subscribing for £5.99 a month, while new customers enticed into the O2 family will get the streaming service for free for six months.
“Offering new and upgrading customers a six-month free subscription, worth £36, will act as a strong pull for consumers who are considering their provider choices in the coming months,” said Nick Baker of Uswitch.
Relationships with telcos are proving to be a very popular way to generate traction in a new market, and Walt Disney already knows the benefits of such a strategy.
During the earnings call at the beginning of February, where Walt Disney CEO Bob Iger said the team had collected 26 million subscriptions in the first six weeks, he also stated 20% of these subs could be attributed to the relationship with Verizon. Such relationships with take a bite out of Average revenue per user (ARPU), but the benefits for the long game are much more significant; this is a recurring revenue play after all.
Alongside the O2 and Sky partnership for mobile and fixed services in the UK, Walt Disney has inked an agreement with Canal+ in France, Deutsche Telekom in Germany and Telefonica in Spain. The team also has a tie-up with US airline Delta, giving passengers on selected routes an opportunity to sign up for a 14-day free trial.
Of course, these relationships work both ways. As the connectivity service becomes more and more commoditised, telcos need to search for ways to differentiate their offering for customers. Partnerships with content creators is a useful way to achieve this objective, and we would hope this could act as a catalyst to reinvigorate the flagging Priority loyalty initiative for O2. This was a very useful initiative to make O2 a competitive force, though it has become somewhat muted in recent years.