Disney Plus To The Rescue? Can We Relax?
Today, some financial analysts see Disney+ as a savior of sorts for The Walt Disney Company as a whole.
And, as far as Disney going to a streaming first strategy, now it makes a whole lotta sense.
Can Disney+ Save The Walt Disney Company
Disney (DIS) stock rose 6% in after-hours trading on Thursday immediately following the earnings report.
That was thanks to one glittering silver lining: Disney+ subscriptions. Exactly one year after the streaming service launched, Disney+ amassed 73.7 million paying subscribers by Oct. 3. Analysts had expected 65.5 million.
Disney’s other two streaming services, Hulu and ESPN+, ballooned to 36.6 million and 10.3 million paying subscribers, respectively. ESPN+ subscriptions grew by 195% from one year earlier (when it had just 3.5 million subscribers), while Hulu subscriptions grew less impressively, its standard package by 27% and Hulu + Live TV by 41%.
Disney now has 120.6 million paying subscribers across Disney+, Hulu, and ESPN+.
While I am not exactly sure I agree that the combo of Disney+, Hulu, and ESPN+ is “breathing down the neck” of Netflix 195 million subs, but I understand the sentiment.
“The sentiment” being Disney+ might just save The Walt Disney Company after the issues caused by the COVID-19 pandemic.
Even at a time when Disney’s parks across the world are either closed or operating at dramatically reduced capacity, streaming is keeping investors positive.
Of course, now the pressure is on for Disney’s streaming platforms to keep performing and gaining subscribers since the pandemic will continue to drag on Disney in 2021. The company estimates the net adverse impact of COVID-19 on its fiscal 2020 was $7.4 billion.
However, a reckoning is coming:
The October 3 end date of Disney’s financial year is key because November marked the end of the promotion that gave Verizon Wireless customers one year of Disney+ for free. Those folks must now either pay for a subscription or lose Disney+. The 2020 Q4 subscriber count comes from before the promotion ended; the company’s Q1 2021 earnings call will reveal how much attrition resulted from the end of the Verizon promotion.
So, I guess we can’t relax. Can we?