Streaming Wars: Will Disney+ Dethrone The Dominance Of Netflix?

As a kid who grew up on a steady diet of Disney movies and the father of a young daughter, there was never a “decision” about whether my household would subscribe to Disney’s (DIS) new streaming service, Disney+.

For investors though, the real question was whether “The Mouse” could expand beyond its direct target market and convince more fringe households to shell out another monthly fee in the ongoing “streaming wars.” Based on the early results, it looks like Disney’s entry into the streaming business has been an absolute blockbuster.

Background

Disney’s history with video streaming is rather fraught: after panning the streaming business for years, and making costly investments into its legacy TV business, Disney belatedly acquired a controlling stake in BAMTech, a streaming technology firm, for $2.6B in August 2017. In addition to using the technology for the ESPN+ sports streaming service, Disney formally announced its intention to launch a general entertainment streaming service last November.

Bolstered by the acquisition of key assets from 21st Century Fox earlier this year, Disney+ launched in the US and Canada last week with an impressive catalog of past movies and TV shows from Disney studios, Marvel, Pixar, National Geographic, and of course, Star Wars. The service intends to launch across Western Europe in March of 2020, with Eastern Europe, Latin America, and the Asia Pacific region set to roll out later in 2020 or early 2021.

At a price of approximately $7/month, with discounts for “bundling” with other streaming services and a year of free access through certain phone plans, Disney announced that it surpassed 10 million subscribers on its very first day. To put it bluntly, these figures were well above expectations: analysts had projected the service would secure 10-18 million subscribers in its entire first year, the app’s servers experienced intermittent outages as a result of the huge demand, and Disney’s stock surged 7% on the day.

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