How Big Could Disney+ Be?

+1.39%
Upside
122
Market
124
Trefis
DIS: Walt Disney logo
DIS
Walt Disney

Disney’s (NYSE: DIS) much-anticipated streaming video service, Disney+, debuted earlier this month, as the media behemoth looks to challenge the likes of Netflix and the upcoming streaming offerings from AT&T and Comcast. The early response to the service has been strong, driven by Disney’s formidable library of legacy content, affordable pricing ($7 per month), and some early partnerships with the likes of Verizon. Disney reported sign-ups of 10 million over the first day (the service offers a 1-week free trial so it is possible that not all users will become paying subscribers). Overall we estimate that the service could bring in close to $4 billion in revenues from the U.S within 2 years. For perspective, Disney posted revenues of about $70 billion in FY’19. In this analysis, we take a look at the current state of the streaming video market and size up the potential of Disney’s service.

View our interactive dashboard analysis What’s The Revenue Potential For Disney Plus?

 

Relevant Articles
  1. Disney Stock Has 2x Upside If It Rises To Pre-Inflation Shock Highs Of $202 Per Share
  2. Disney Stock Could Rise Over 2x If It Recovers To Pre-Inflation Shock Highs
  3. Will Slowing Streaming Growth Impact Disney’s Q3 Results?
  4. Disney Stock Could More Than Double If It Recovers To Pre-Inflation Shock Highs
  5. A Deep Dive Into Disney’s Streaming Operations After A Tough Q2
  6. What To Expect As Disney Reports Q2 Results?

A Closer Look At The Streaming Video Market In The U.S.

  • While Netflix had over 60 million U.S. subscribers as of 2018, Amazon’s Prime offering, which includes a video service, has over 100 million customers. Hulu had about 25 million subscribers.
  • Hulu’s monthly ARPUs are the highest, standing at an estimated $13 in 2018, driven by its ad-supported model, followed by Netflix at about $11, and Amazon Prime at $10 ($120 for an annual subscription)
  • Amazon Prime generates the highest revenues, estimated at about $12 billion in 2018, followed by Netflix and Hulu, which posted U.S. revenues of $7.6 billion and $4 billion, respectively.
  • Amazon Prime remains tops in terms of U.S. household penetration with about 79% of U.S. households opting for the service in 2018, followed by Netflix and Hulu at ~48% and 20%, respectively.

Estimating Disney+ Subscribers and Revenues

  • We estimate that Disney+ will see adoption by 20% of U.S. households by 2020, with the number rising to 34% by 2022.
  • This would translate into a paying subscriber base of 26 million by 2020 and 44 million by 2022.
  • At an ARPU of $7 per month, we estimate that Disney+ will garner revenues of about $2.2 billion in 2020, with the number rising to close to $4 billion by 2022.

For more information and charts on how we estimate Disney+’s revenue, view our interactive dashboard analysis.

 

What’s behind Trefis? See How it’s Powering New Collaboration and What-Ifs

For CFOs and Finance Teams | Product, R&D, and Marketing Teams

More Trefis Data

Like our charts? Explore example interactive dashboards and create your own.