There has been a lot of competition amongst streaming service providers over the past couple of years. However, things have really started to heat up in 2020, when more people were staying at home due to lockdowns. It was during this time that many different streaming providers saw subscriber counts surge and their stock prices grow. While Netflix (NASDAQ: NFLX) has traditionally been the leader in this area, other companies have been following suit with their own offerings.
Disney (NYSE: DIS) announced on Tuesday that its streaming platform, Disney+ broke 100 million subscribers. It’s a major milestone for the fast-growing service, which only got started around 16 months ago. According to the recent numbers, Disney+ has been adding around 8 million new subscribers every single month and has become one of the most profitable business segments for Disney, especially since its other units, like its parks, are not operational.
“The enormous success of Disney+, which has now surpassed 100 million subscribers, has inspired us to be even more ambitious, and to significantly increase our investment in the development of high-quality content,” said Disney CEO Bob Chapek in an official statement about the milestone.
To put this into comparison, Disney had an original target to get Disney+ subscriptions anywhere from 60 to 90 million by the end of 2024. The company has already vastly surpassed that and seems poised to hit 200 million sometime in 2022, if not a bit sooner. Although current estimates at that the numbers will hit 240 million by 2024, it wouldn’t be surprising if that’s also a conservative estimate.
In contrast, physical stores have been struggling for Disney, which has announced that it plans to cut around 20% of its store locations to cut costs. Instead, Disney will be moving to transition more into the world of e-commerce, where overhead costs are cheaper than usual.
Shares of Disney actually dipped a little in response to the news, at least, at first. Quickly after, however, Disney’s stock rebounded and is currently more or less unchanged in pre-market trading. Over the past 12 months, shares have steadily climbed from around $110 to approximately $195. Additionally, most analysts covering Disney are bullish about its future, especially given how well its Disney+ business is doing. At this rate, Disney+ could catch up with Netflix’s numbers, around 204 million subscriptions, faster than most people anticipated.
Disney Company Profile
The Walt Disney Co owns the rights to some of the most globally recognized characters, from Mickey Mouse to Luke Skywalker. These characters and others are featured in several Disney theme parks around the world. Disney makes live-action and animated films under studios such as Pixar, Marvel, and Lucasfilm and also operates media networks including ESPN and several TV production studios. Disney recently reorganized into four segments with one new segment: direct-to-consumer and international. The new segment includes the two announced OTT offerings, ESPN+ and the Disney SVOD service. The plan also combines two segments, parks and resorts and consumer products, into one. The media networks group contains the U.S. cable channels and ABC. The studio segment holds the movie production assets. – Warrior Trading News