Walt Disney (NYSE: DIS) ended all expectations with its streaming service Disney +, both its own and that of analysts. Subscriber account that the entertainment giant thought it would take years to achieve occurred in just a few months.
Certainly the pandemic COVID-19 played a role in overloading the numbers, as well as free trials Verizon offered to its subscribers and the low cost of the monthly subscription. But other services that were also launched around the same time as Disney + and enjoyed similar advantages did not have the same level of adoption among consumers.
Now Disney + is on track to reach and potentially overcome Netflix (NASDAQ: NFLX) next year.
Image source: Disney.
Increasing the score
Much credit for the recent growth of streaming belongs to Star Wars spinoff series The Mandalorian, an episodic western space drama that returns to the roots of the film franchise and pays homage to the classic narrative that made original films dear to millions of fans.
Even so, Disney also has a huge library of movies and TV shows that it was able to access, including content more often than not aimed at children, which proved vital with families trapped at home during the blocks and with the cinemas closed. .
All of this is translating into impressive subscriber growth, even as Netflix sees its momentum waning. The streaming pioneer also saw a peak in new subscriber additions at the start of the pandemic – added 25.86 million new accounts in the first half of 2020, almost the same number he added throughout 2019. However, this growth slowed to a trickle in the third quarter, when Netflix added just 2.2 million subscribers, and only 177,000 were in the U.S.
This happened even when Disney + grew from 33.5 million subscribers in the second quarter to 57.5 million in the third. In the coming years, Disney could very well surpass Netflix to become the leading name in streaming. And in terms of revenue, Disney could take first place as early as 2022.
Disney + and Hulu are a powerful combination
EMarketer predicts that Disney + streaming revenue in the U.S. will grow from $ 1.94 billion in late 2020 to $ 4.23 billion in 2022, aided by the $ 1 per month price increase that will take effect in March.
At that point, revenue will still be shy of the $ 12.95 billion eMarketer expects Netflix to generate next year, but let’s not forget the other parts of Disney’s streaming operation. By adding Hulu and ESPN + to the mix, Disney could generate an estimated $ 12.36 billion in streaming revenue, very close to first place.
While Disney + has impressed investors with its rapid growth, Hulu actually accounts for more than 67% of the company’s streaming revenue. It will be the combination of Disney + and Hulu that will eventually put Disney at the top.
Why it might not work
The actual number of subscribers for Disney + only will take a little longer to reach Netflix. EMarketer estimates that by 2024 Netflix will have 182.2 million subscribers in the U.S., with Disney + growing to 123.4 million. Looking ahead, it is easy to see how Disney + can become the leader in the next decade.
But there are factors that can impact these projections. For example, if movie theaters are able to reopen and operate again with a decent list of big-budget films to attract viewers, this would likely affect the demand for streaming content.
ATT it is also making a great effort to make its HBO Max service an even more viable streaming alternative. His Warner Bros. studio will launch its entire list of 2021 films directly to the streaming service on the same day they are shown in theaters. This could attract more subscribers to HBO Max, although Disney has promised to release a series of films for Disney + as well.
Battle for supremacy
Analysts have suggested that consumers have an appetite and budget for just two or three streaming services to complement their viewing habits. Netflix is a given, and the same goes for Amazon Prime Video as it is included in the Prime subscription.
That left the rest of the field fighting for the next one or two places, but it looks like sooner than anyone expected, it will be Disney at the top of the video streaming industry.