Disney is on track for Dethrone Netflix streaming

Walt disney (NYSE: DIS) blew all expectations away with its Disney + streaming service, both its own and those of analysts. The subscriber reckons that the entertainment giant believed it would take years to reach it in a matter of months.

Certainly, the COVID-19 pandemic has played a role in overfeeding the numbers, as have the free trials Verizon offered to its subscribers and the low cost of monthly subscription. But other services that also launched around the same time as Disney + and had similar benefits have not seen the same level of adoption among consumers.

Now Disney + is on track to catch up and potentially surpass Netflix (NASDAQ: NFLX) from next year.

Climb the score

A lot of credit for the recent growth of streaming goes to the Star wars derivative series The Mandalorian, an episodic Western space drama series that goes back to the roots of the film franchise and pays homage to the classic storytelling that endeared the original films to millions of fans.

Yet Disney also has a huge library of movies and TV shows it was able to tap into, including content most often aimed at children, which has proven to be vital with families stuck at home. during lockouts and closed cinemas.

All of this is translating into an impressive growth in subscriber numbers, even as Netflix sees its momentum slowing. The streaming pioneer also saw a spike in subscriber additions at the start of the pandemic – he added 25.86 million new accounts in the first half of 2020, almost as many as he added for all of 2019. However, that growth slowed to a trickle in the third quarter, when Netflix added just 2.2 million subscribers, and only 177,000 were in the United States.

This happened even as Disney + went from 33.5 million subscribers in the second quarter to 57.5 million in the third. Over the next few years, Disney could very well surpass Netflix to become the leader in streaming. And in terms of revenue, Disney could take the top spot as early as 2022.

Disney + and Hulu are a powerful combination

eMarketer predicts that Disney + streaming revenue in the US will grow from $ 1.94 billion at the end of 2020 to $ 4.23 billion by 2022, thanks to the one dollar price increase per month which will come into effect in March.

At this point, revenue will still be lower than the $ 12.95 billion that eMarketer expects Netflix to generate next year, but let’s not forget the other elements of Disney’s streaming operation. By adding Hulu and ESPN + to the mix, Disney could generate an estimated $ 12.36 billion in streaming revenue, well close to the top spot.

While Disney + has impressed investors with its rapid growth, Hulu actually accounts for over 67% of the company’s streaming revenue. It will be the combination of Disney + and Hulu that ultimately puts Disney at the top.

Why this might not be

The actual number of subscribers for Disney + alone will take a little longer to catch up with Netflix. eMarketer estimates that by 2024 Netflix will have 182.2 million subscribers in the United States, with Disney + rising to 123.4 million. Looking further, it’s easy to see how Disney + could turn out to be the best dog over the next decade.

But there are factors that could influence these projections. For example, if theaters are able to reopen and operate again with a decent selection of big budget movies to attract moviegoers, that would likely hurt the demand for streaming content.

AT&T is also making a big effort to make its HBO Max service even more of a viable streaming alternative. His studio Warner Bros. will release its entire 2021 film selection straight to the streaming service on the same day they hit theaters. This could attract more subscribers to HBO Max, although Disney has also promised to release a series of feature films on Disney +.

Battle for supremacy

Analysts have suggested that consumers have an appetite and budget for just two or three streaming services to supplement their viewing habits. Netflix has long been acquired, and so is Amazon Prime Video because it is included with the Prime membership.

That left the rest of the bunch fighting for the next one or two positions, but it looks like sooner than expected, it will be Disney sitting at the top of the streaming video industry.