×

Disney Projected to Top 130 Million Online Video Subscribers in 5 Years (Analyst)

Disney could have more than 130 million subscribers across its online video services worldwide by 2024, Morgan Stanley analyst Benjamin Swinburne projected in a note to investors Thursday. The forecast resulted in Disney shares trading up 4.4%, while Netflix shares were down 1%.

In the near term, Swinburne expects Disney to sign up 13 million subscribers by the end of 2020. At that point, Disney could have a total of 50 million subscribers across Disney Plus, Hulu and ESPN Plus.

Swinburne based his projections on Disney’s faster-than-expected international launch plans for its upcoming Disney Plus service. Disney Plus is scheduled to launch in the U.S. in November, and then come to Western Europe in late 2019 and early 2020. Roll-out across the Asia-Pacific region will  begin in late 2019 and continue through 2021, while a launch in Latin America is planned for early 2021.

At the low end, Disney Plus should gain 60-90 million subscribers in 5 years, Swinburne argued, noting that this would only represent 10% of addressable broadband homes, compared to the 25-30% that Netflix has been able to capture. Even with those conservative numbers, Disney Plus could be profitable by 2024, thanks in part to the fact that the company will need to spend less on brand advertising.

Swinburne also addressed concerns that Disney Plus could cannibalize other revenue streams. “While all valid concerns, we believe the market has often overstated the risk and underappreciated the reward of the transition to streaming,” he wrote. “Stepping back and admittedly taking the long view, investing in Disney shares is a play on the durability of its IP.”

However, Swinburne also cautioned that Disney may face some challenges as it shifts key parts of its business to online video. “Disney is not a tech company in its DNA, nor does it have a long history as a direct-to-consumer digital retailer,” he wrote.

Disney shares jumped $6.02 to $141.74 a share on the New York Stock Exchange on Thursday. Disney stock hit a record high of $142.35 a share in April following the release of mega-hit “Avengers: Endgame.”

Shares of Netflix declined by $2.13 to $343.43 on the Nasdaq on Thursday.

More Digital

  • Vobile - ZEFR acquisition - Yangbin

    Zefr Sells Its Copyright-Flagging and YouTube Channel-Management Businesses to Vobile for $90 Million

    Vobile Group, a video protection and measurement company, announced a deal to acquire Zefr’s RightsID copyright-management and ChannelID YouTube channel-management businesses for about $90 million. According to the companies, Zefr’s RightsID and ChannelID together generated over $40 million in revenue in 2018 and were profitable. The deal stands to more than triple the revenue for [...]

  • Justin Connolly

    Disney Merges All Media Sales and TV Channel Distribution Under Justin Connolly

    Disney promoted Justin Connolly to the new role of president, media distribution, overseeing a single organization that combines all of the company’s media sales and TV channel distribution operations. Connolly previously served as EVP, affiliate sales and marketing, Disney and ESPN Media Networks. Based in New York, he will report to Kevin Mayer, chairman of [...]

  • NASA - International Space Station

    Hulu Is Getting NASA TV in Time for the Moon Landing Anniversary

    Hulu’s live TV service is getting NASA TV just in time for the 50th anniversary of the Apollo 11 mission. In addition to a live feed, which is available only to subscribers of Hulu’s live TV tier, Hulu is also gaining access to select NASA TV series on demand. The live TV deal was announced [...]

  • iheartmedia logo

    iHeartMedia Stock Drops in NASDAQ Debut

    Shares of iHeartMedia, the U.S.’s biggest radio network, fell as much as 7% after they commenced trading Thursday on the NASDAQ Global Select Market, and ended the day down around 3%. Last month, after exiting a year-long bankruptcy reorg, iHeartMedia announced it was approved for listing on NASDAQ, instead of pursuing an IPO. The company’s [...]

  • iHeartMedia-Pride-Media-TheOutcast-Logo

    iHeartMedia, Pride Media to Co-Produce Slate of LGBTQ+ Podcasts

    iHeartMedia is teaming with Pride Media, the media company whose brands include Out, The Advocate and Pride, to co-produce a slate of LGBTQ+ podcasts in 2019-20. The partnership will kick off with “The Outcast,” an iHeartRadio original podcast co-produced with Out Magazine. Hosted by Out Magazine deputy editor Fran Tirado, the weekly podcast will explore [...]

  • Netflix Reed Hastings

    Netflix Shares Dive After Q2 Stumble: Just a Hiccup or Sign of Bigger Trouble?

    Netflix badly undershot its subscriber forecasts for the second quarter of 2019 — posting its first net U.S. customer decline since 2011 while growth slowed considerably overseas. The company added 2.7 million subs worldwide, almost half as many as the 5 million it had projected. With the big miss, Netflix shares took a predictable hit, [...]

More From Our Brands

Access exclusive content