& cplSiteName &

Disney+ Poised to Rake In 24M Subs by 2023 – Forecast

Jeff Baumgartner

With an influx of OTT-delivered subscription VOD services on the horizon from some major players set to arrive later this year, the debate about who will win the race -- or at least stay in the front of the pack -- is in full swing.

Much will be revealed about Disney+ at the company's investor day on April 11. But one top analyst already believes that this new service is well positioned to take on Netflix, as well as outdo other SVoD services on the way from WarnerMedia, NBCU and even Apple.

Before we dive into the content strategy that will fuel Disney+, MoffettNathanson's Michael Nathanson forecast in a new report on the SVoD sector that The Mouse's new service is poised to rake in 7.1 million subscribers in its first year, and grow to almost 24 million by the end of 2022. And he called those totals "conservative," given the power of the combined Disney/Fox library that will underpin Disney+.

While that still leaves Disney+ with lots of ground to gain if it's to catch Netflix (which ended 2018 with 139 million subs worldwide), that's a steep growth ramp, if the forecast holds up. The analyst also holds that Disney+, which will feature content from the acquisition of Fox, puts the service in great position to run the Netflix playbook using a massive content vault comprised of big movies, library content, off-network serialized TV shows and an array of "sizzle-worthy" originals.

Among the three major SVoD services slated to launch in 2019 -- Disney+, Apple TV+ and a set of services from AT&T's WarnerMedia -- "[W]e think that only one, Disney+, is ready for primetime," Nathanson explained.

Of note, some 47% of the combined domestic box office of the top 100 films of all time are with Disney/Fox, more than double the next-highest studio, Warner Bros. Disney and Fox also have the greatest number of the top 100 TV shows, at 19, according to IMDB, Nathanson noted.

That content combo also fits well with a recent survey from Nielsen finding that 57% said a variety of content was the most important attribute for a streaming service, while 52% cited access to movies.

While Nathanson questions why Disney doesn't come out of the gate with an SVoD offering that ties in Hulu, he argues that Disney+ "is the only one that has the aggregate clout in film and TV libraries, simplicity of offerings and brand strength to scale in the mid-term."

He likewise believes that WarnerMedia is "ignoring the brand strength and built-in subscriber base of HBO" for its coming set of SVoD services, and notes that NBCU is more focused on a direct-to-consumer OTT model that is going to lean partly on targeted advertising. And though Apple TV+ has some huge names involved, the service isn't focused on catalog content, forcing Apple to spend heavily on originals to attract customers, he added.

"These companies [WarnerMedia and NBCU] have the libraries, but they seem incapable of understanding how to use them," he explained, wondering why WarnerMedia, for example, didn't try to bundle popular library TV properties like Friends with HBO Go and HBO exclusively rather than dilute its offerings by letting Netflix keep it on its service (for a reported $100 million).

And despite the anticipated strength of Disney+, the hole in that strategy, at least near-term, is that it won't have more to do with Hulu, at least at the start. "By segmenting Hulu into an adult service and Disney+ into a family product, we worry that penetration will be sub-optimal," Nathanson concluded.

But that penetration will still be plenty optimal for Disney+ to get off the blocks and get ahead of the other new players and, perhaps, take a real run at Netflix.

Related posts:

— Jeff Baumgartner, Senior Editor, Light Reading

(0)  | 
Comment  | 
Print  | 
Threaded  |  Newest First  |  Oldest First        ADD A COMMENT
More Blogs from The Bauminator
Xfinity Flex, now offered for free to broadband-only subs, provides streaming apps and smart home capabilities – but it's also something else.
Cable op has quietly launched the Contour Stream Player, Cox's twist on Comcast's Xfinity Flex video streaming product for broadband-only subs.
The media giant has apparently passed on tacking on '+' to the end of the name of the OTT service that will launch next spring and feature more than 15,000 hours of content.
Unlike Disney, the newly formed ViacomCBS isn't expected to forgo lucrative licensing dollars just to pump fuel into its OTT, direct-to-consumer plans.
Countdown to the debut of a new video streaming service connected to Omniverse CEO Jason DeMeo featuring 50 'top' US TV channels starting at $50 leads to nothing... so far.
Featured Video
Upcoming Live Events
October 1-2, 2019, New Orleans, Louisiana
October 10, 2019, New York, New York
October 22, 2019, Los Angeles, CA
November 5, 2019, London, England
November 7, 2019, London, UK
November 14, 2019, Maritim Hotel, Berlin
December 3, 2019, New York, New York
December 3-5, 2019, Vienna, Austria
March 16-18, 2020, Embassy Suites, Denver, Colorado
May 18-20, 2020, Irving Convention Center, Dallas, TX
All Upcoming Live Events
Partner Perspectives - content from our sponsors
Edge Computing, the Next Great IT Revolution
By Rajesh Gadiyar, Vice President & CTO, Network & Custom Logic Group, Intel Corp
Innovations in Home Media Terminals for the Upcoming 5G Era
By Tang Wei, Vice President, ZTE Corporation
All Partner Perspectives