Verizon is taking the financial hit on the free Disney+ streaming deal.
While neither company has provided firm details on the deal, Disney's CEO recently confirmed Verizon is the one paying.
Disney+ is due to launch in the U.S. on November 12, priced at $6.99 per month.
Free streaming for Verizon customers
Earlier this week, Verizon announced its unlimited wireless customers were being treated to free Disney+. The deal means all Verizon 4G LTE and 5G unlimited customers will be able to watch the $6.99 per month service for free, for one year.
Now, thanks to an interview with Disney's Bob Iger, we know this is a treat on Verizon's dollar.
Iger was specifically asked whether Disney+ was simply using this deal as a marketing tool. In other words, would Disney be losing money due to all the free subscriptions that are being given out.
However, Iger explained there's no money lost from its side of the fence. Adding, "it's a wholesale deal to us so we will get paid for that." Further adding, "they [Verizon] will also support us with a lot of marketing."
A win-win deal for Disney
Irrespective of who's paying, the impact of the deal was not lost on Iger. During the interview, the Disney CEO acknowledged the Verizon backing was a big win for the new service. Iger explained how this will have a "significant effect" on "jump-starting subscriptions."
This is of course at a time when both Apple and WarnerMedia will be looking to also convince subscribers to go with their new subscription services. While the Verizon deal will help to boost initial subscriptions, Iger stated Disney was not particular phased about the competition.
For one thing, Disney feels it has a unique product compared to the other survives. On top of this, like the Verizon deal, Disney has been pushing hard to get people to sign up for the streaming service for longer periods of time.
For example, while this is a cancel anytime, monthly subscription, Disney has been promoting one year and even three-year subscriptions. Those who have signed up for lengthier commitments have typically been rewarded with a discount on the monthly cost. An approach being used by Disney as a means to help lower subscriber migration following the launch of the service.
Speaking of the launch, although Disney+ is not due to go live in the U.S. until November 12, everything appears to be on track, if not even a little ahead of schedule.
While Disney is still doing some "tweaking" to the service, Iger stated "we could launch today."