Disney+ drops US free trial in sign of subscribers strength

The $7-a-month video service, which launched in the U.S. in November, has already signed up more than 54 million customers, surprisingly quick adoption for a new consumer product.

FILE PHOTO: A screen shows the logo and a ticker symbol for The Walt Disney Company on the floor of the New York Stock Exchange (NYSE) in New York, U.S., December 14, 2017. REUTERS/Brendan McDermid/File photo (REUTERS)

Walt Disney Co. has stopped offering one-week free trials for its Disney+ streaming service in the U.S., the latest sign the product is off to a strong start.

 Other streaming services, including industry pioneer Netflix Inc., continue to offer free trials.

The end of the promotion comes just before the July 3 release of a filmed performance of the Broadway show “Hamilton,” which will likely draw a broad audience to the service. Disney hasn't been promoting the free trial for several weeks.

“We continue to test and evaluate different marketing, offers and promotions to grow Disney+,” the company said in a statement. “The service was set at an attractive price-to-value proposition that we believe delivers a compelling entertainment offering on its own.”

Disney+ features virtually all of the company's films on demand, from “Snow White” to “Avengers: Endgame,” as well as original content such as Star Wars series “The Mandalorian.” As with many other streaming services, Disney doesn't require a contract and customers can cancel at any time.

Services can sometime see their monthly new subscribers jump fivefold or more when they offer popular exclusive new content, according to Dan Burkhart, chief executive officer of Recurly Inc., a payment-processing company.

‘Their Moment'

“Disney+ is no different,” he said. “‘Hamilton' is their moment -- their bet to bring a new and hopefully large cohort of subscribers who'll stick around for more of Disney programming.”

Disney already hadn't been offering the free trial with its $13-a-month promotion that packages Disney+ with the company's Hulu and ESPN+ services. But the entertainment giant is still offering one-month free trials in Japan, where Disney+ just launched.

While all TV and film producers face a challenge creating new content -- with the world having been on virus-related lockdown for the past three months -- Disney has been able to take some of the films it originally planned to show in theaters, such as the teenage spy thriller “Artemis Fowl,” and put them directly on the service.

The company has also been able to cross-promote the product on its other channels. Last month, it aired two episodes of the Disney+ original series “The World According to Jeff Goldblum” on its Nat Geo cable network, for example.

Churn, or the cancellation of service, is a huge issue for streaming services. Customers often sign up for new seasons of shows, as many did for HBO's “Game of Thrones,” and then cancel afterward. Getting rid of free trials locks in more revenue from such samplers.

Disney+ launched with an offer of one year free for Verizon Communications Inc. customers. In February, Disney said about 20% of subscribers came through that promotion, which is still available.