Walt Disney Co. (NYSE: DIS) management has hosted its investor day, and corporate leaders made it clear that Disney’s streaming services growth will crush competition from Netflix, Apple, Amazon and HBO Max. The forecast showed plans to reach 300 million to 350 million subscribers by its fiscal 2024.
It is hard to imagine any streaming service or services owned by one company could do so well as they claim. Netflix Inc. (NASDAQ: NFLX), considered the industry leader, has fewer than 200 million subscribers today. The Prime streaming service from Amazon.com Inc. (NASDAQ: AMZN) may have that many. The total at Apple Inc. (NASDAQ: AAPL) is in the tens of millions. HBO Max, an AT&T Inc. (NYSE: T) product, has a similar count.
CEO Bob Chapek and longtime Disney leader Bob Iger, executive chair and chairperson of the board, made it clear how they plan to drive the hyper-growth. Disney’s primary streaming services include Disney+, which currently has 86.8 million subscribers, Hulu which has 38.8 million and ESPN+, which has 11.5 million. Management described the current Disney+ figure as “staggering.”
The primary weapon for all the largest streaming services is the same: content. As part of the investor presentation, management said, “Disney+ alone is targeting to release more than 100 titles per year.”
Content controlled by AT&T’s WarnerMedia has driven subscribers to HBO Max. Netflix, Amazon and Apple essentially have built their own studios. Among them, they spend hundreds of millions of dollars a year to create exclusive content on the theory it represents the key to subscriber growth.
Disney management must know saturation represents the major challenge to growth. Americans, research shows, subscribe to an average of 3.4 services. Amazon, Netflix and now Disney dominate the market. While similar numbers are hard to come by outside the United States, each service will need to do well outside the country, as Netflix numbers show.
Among Disney’s advantages is the inventory of wildly successful movies it already has. Some are among the top-grossing movies of all time. Disney owns the libraries of Disney, Pixar, Marvel, Star Wars and National Geographic.
A figure of 300 million to 350 million subscribers shows how audacious Disney management has become. However, for the time being, they have the success to back it up.
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