When Will Disney Plus Take The Streaming Top Spot?
Less than a week after the latest Walt Disney Company investors’ call, business analysts are beginning to wonder when (not if) Disney+ will catch up to Netflix.
In fact, noting it took Netflix nine years to reach 95-million subs, Bloomberg’s Lucas Shaw posted the question: How Long Will It Take for Disney to Catch Netflix?
Can Disney+ Catch Netflix?
This depends on how you look at it.
Netflix has grown at record pace even with Disney+ as the competition, and will remain the top dog for the foreseeable future.
But Disney has had all this success with only a couple of new shows. It’s going to ramp up its selection of new series and movies in no time, and no company’s movies have a stronger following abroad than Disney. If Disney can sustain anything close to its current momentum, watch out.
Then, today, The Hollywood Reporter’s Georg Szalai reported:
Digital TV Research shared the prediction in a new report on Monday. It projects that the number of subscribers to Disney+ will reach 294 million in 2026, exceeding the 286 million that it estimates Netflix will reach then.
Chapek Said So…
This falls straight into line with what Disney CEO Bob Chapek said during the February 11 call presenting First Quarter Earnings for Fiscal 2021.
“We believe the strategic actions we’re taking to transform our Company will fuel our growth and enhance shareholder value, as demonstrated by the incredible strides we’ve made in our DTC business, reaching more than 146 million total paid subscriptions across our streaming services at the end of the quarter,” said Chapek. “We’re confident that, with our robust pipeline of exceptional, high-quality content and the upcoming launch of our new Star-branded international general entertainment offering, we are well-positioned to achieve even greater success going forward.”
However, the enthusiasm for Disney+ and DIS stock is not universal.
Not Everyone Loves DIS
On February 12, and with Disney stock dropping during trading on Friday, one analyst asked: How many times can investors get paid for the same thing?
Bernstein’s Mark Shmulik… argued that Disney shares, which are up 33% over the past year, already price in the opportunities in streaming and an economic recovery, without accounting for risk.
“Of course the market is forward-looking,” he wrote. “But even if one believes that Disney will ‘catch up’ to Netflix subs and ARPU, there is still significant time and risk for which shareholders need to be compensated (not to mention the negative free-cash flow between now and then).”
After a break from trading today, the market will be back open on Tuesday. My 11.5 shares and I will be very interested in whether optimism wins out.