How Big Could Disney+ Be?

by Trefis Team
-3.74%
Downside
130
Market
125
Trefis
DIS
Disney
Rate   |   votes   |   Share

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?

 

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.

Rate   |   votes   |   Share

Comments

Name (Required)
Email (Required, but never displayed)
Be the first to comment!