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Disney+ Could Bring In $4 Billion In U.S. Revenues By 2022
Disney's 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 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.
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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
Amazon Prime Users for 2016 and 2017 are estimates.
Netflix U.S. Subscribers
U.S. Amazon Prime Users
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Hulu Subscribers
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Estimating Disney+ Subscribers
We estimate that Disney+ will see an adoption by 20% of U.S. households by 2020, with the number rising to 34% by 2022.
This would translate into paying subscriber base of 26 million by 2020 and 44 million by 2022.
Disney+ Subscribers [A x B]
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Number of U.S. Households [A]
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% of U.S. Households Opting for Disney+ [B]
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Estimating Disney+ Annual Revenue
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.
Annual Revenue = [A x B x 12]
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Monthly ARPU [A]
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Disney+ Subscribers [B]
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References
U.S. Household Data: Census.gov
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