Disney’s Shares Jump in Anticipation of Streaming Service

Wall Street has high hopes for Disney+.

Disney recently released its fourth-quarter earnings report, which largely missed Wall Street’s guidance. The company’s earnings were down 28% from a year earlier, but analysts seemed more than willing to overlook this fact.

The reason? Disney’s new streaming service launches in the U.S. today. 

Here is an overview of the new service, what Wall Street is saying about it, and what this could mean for Disney going forward.

An overview of Disney+

Disney+ is Disney’s highly anticipated streaming service, and it launches this week. The service will be released across the U.S., Canada, and the Netherlands on Nov. 12. 

It will roll out across the rest of the world through the remainder of November. This mostly depends on how quickly the company was able to gain access to its library across various countries.

The service will cost $6.99 per month and is expected to be a hit with consumers. When the service launches, it will offer classic Disney movies as well as tons of original content. The company is launching a TV series called “The Mandalorian,” which will be based on the Star Wars universe. 

Analysts have high expectations for Disney+ and are already singing the company’s praises. One Goldman Sachs analyst believes the draw for Star Wars fans alone will be enough to build Disney’s subscriber base.

A MoffettNathanson analyst expects the service to reach eight million subscribers by the end of 2019. Another analyst from Wells Fargo agrees and believes the company will reach 21 million subscribers by the end of fiscal 2020.

The stakes are high for Disney

The anticipation over the pending “streaming wars” has been building over the past six months. Disney has a lot riding on its new streaming service, and it needs this service to transition away from cable successfully.

Fortunately, the company seems to be off to a good start. Disney snagged distribution deals with both Verizon and Amazon customers, which should help the company add millions of additional subscribers. 

Plus, the company has seen significant demand from consumers for this service. Disney CEO Bob Iger has stated that the company is feeling positive that consumers will embrace the new streaming channel. And one analyst agreed and stated that, “We might be underestimating the size of the first year of launch.

Previous

Next