Disney is riding high after the successful launch of its streaming service.
Last week, Disney + launched in the U.S., Canada, and the Netherlands, and the early numbers were impressive. The streaming service landed over 10 million subscribers on its first day. And the service still has yet to launch in Australia, New Zealand, and Western Europe.
Many users did complain about technical glitches, but overall, the launch was a huge success, and Disney’s stock rose more than 7%. Here are four things you should know about the Disney+ launch and what this means for the company’s stock going forward.
1. The company expects to gain 60 to 90 million subscribers
Disney has big plans for its subscription service, and last April, the company stated it expects to add 60 to 90 million new subscribers by 2024. The company anticipates that one-third of those subscribers will be located in the U.S.
The company’s strong early numbers put it on track to reach its goal. If anything, Disney management underestimated how successful the streaming service will be.
2. Disney will lose some of its early subscribers
Of course, Disney will lose some of the early subscribers that signed up on promotional plans. Over the summer, the company ran a discounted three-year promotion.
And the company offered Verizon customers a free seven-day trial. So some of those customers will probably jump ship when the free trial is over.
3. Disney’s legacy content is the real draw
Disney+ launched with a variety of original content, including the series The Mandalorian, which is based on the Star Wars franchise. Disney’s original content was well-received by customers, but when it comes to Disney+, the real draw is the company’s legacy content.
Its current subscribers want access to Marvel, Star Wars, and Pixar movies. But at some point, Disney will need a way to expand its service beyond its current customers, so it will need to grow its library of original content.
4. Wall Street is optimistic about Disney+
In spite of the successful launch, Disney has stated that it doesn’t expect the service to be profitable until 2024. And the company will likely take some heavy losses in the meantime.
But right now, Wall Street is very optimistic when it comes to Disney+, and the stock is considered a strong buy. According to a Bank of America analyst, the new streaming service’s growth could cause the company’s stock to rise by 20% over the next year.