Prudence Pitch

10:30 30/11/2019 |

Total post : 1,458

Disney puts up strong receipts all year that have not managed to move the stock to the highs seen this week

(Business) Earlier this month Disney’s much anticipated streaming service debuted in the United States to what were by all accounts stunning initial results. Disney+ racked up more than 10 million subscriptions in its initial week, showcasing the power of the Disney content universe. New numbers from Apptopia this week confirm the initial launch numbers were just the beginning of the platform’s growth; the Disney+ app saw 15 million downloads in the past two weeks, averaging about a million new users per day. 



These impressive numbers have led some analysts to predict Disney will reach its goal of 60 to 90 million subscribers two years ahead of schedule. To be sure, there are fair questions to be answered about churn as many of the new subscriptions likely flow from the free one-year trial deal Disney struck with Verizon, and many more took advantage of the free 7-day trial period Disney extended as part of its mega-marketing blitz.

What is undeniable, however, is the unrivaled fan base Disney+ has built into its service that will make its beloved content library and its new original programs aligned with Star Wars, Marvel, and Pixar a must-have service for the 30+ million US households with children. And, while impressive on its own, with more 500 movies and 7,000 episodes of television, the real Disney+ magic lies in the network effects it can draw upon to deepen penetration into the broader streaming market.

With so much initial attention focused on the Disney+ launch, it’s understandable that the Disney+ / Hulu / ESPN bundle that was also launched this month received less attention. The Apptopia report also provides a closer look at the longer-term streaming horse race shaping up and shows the positive add-on effects Disney+ is having for ESPN and Hulu.  According to the data, both have experienced 50% increases in app downloads since the launch of the bundle service.

While Disney+ will have no ads (as of now), it’s clear Disney also sees an opportunity with its bundling strategy with Hulu to tap into the $70 billion US television advertising market that is just beginning to move to streaming platforms. The Disney / ESPN / Hulu bundle is only available with the ad-supported Hulu subscription.  The brilliance of Disney’s plan is it gets to have its cake and eat it too, as it plays to both the segment of the population that wants no ads and those that want to tip their toe into the streaming waters but are not ready to shell out large sums for all ad-free content.

Disney’s strategy to leverage its content advantage to bolster both its platform and advertising play with Hulu and ESPN offers a hulk-sized market advantage that will be hard for many competitors to replicate.


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