How Disney's New Streaming Channel Stacks-up

Disney launched Disney+ yesterday - to a lot of hoopla and fanfare. The business press was all aglow in how this online subscription channel would be bad for both Netflix and Apple (which launched its own channel last week).

CMG thinks to the contrary.  We think Disney is too late with too little. At the price point of $6.99 per month, Disney+ is cheaper then the other streamers but also has less to offer - old pixar and other animated films, Star Wars flicks (all of which have already played numerous times on broadcast TV), and the Marvel films (again 'have been seen before over and over').

Disney will get an initial burst of subscribers but then flatten out and don't forget they will have to decide whether or not to run new movies in cinemas (and how long that window will be open) or run day-and-date. My guess is Disney will not want to put their cinema release posture in peril and will screen new films 2-4 months after their theatrical release on Disney+.

In the world of streaming movie and other entertainment content Netflix is in a world of its own (reference all of the posts to this blog on Netflix over the past 3-4 years).  How the other streamers stack up against each other and Disney+  is partly detailed in the above chart. It is forecasted that Disney+ will have 30 million subscribers by 2024, that makes sense. Apple, with it over 1 billion users of its equipment is forecast to have 50 million by 2025, that also makes sense.
In comparison, Netflix currently has over 180 million subscribers worldwide.

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CMG believes Netflix's subscription base will be well north of 225 million in 5 years time - greater than all of the other major streamers combined.

Disney continues to rely too heavily on its past. Hospitality, films, ESPN, etc. just won't cut it going forward. Disney+ is a great idea but it comes too late to the party. Disney will have to produce lots of new content for Disney+ and that will take lots of money - at $6.99 per month, there is no way Disney can run + and make a profit. And don't forget the looming massive debt and management issues that have to be swallowed after the Fox asset purchase. 

Good luck Mickey.

Jim Lavorato, President
Entertainment Equipment Corp.