Disney is betting big on its Direct To Consumer streaming platforms and after all the news coming out of the Investor Day, the market has reacted very positively to the strategy, as Disney’s stock went up 10% to an all-time high of $128 in Friday morning trading.
However this move has already hit Netflix in the pocket, as Netflix’s stock was down more than 3%.
With Disney+ set to include a vast library of content, both new and old, featuring many of the biggest brands on the planet, all at the low price of $6.99. Much lower than Netflix’s current offering and with increased competition from Hulu, Amazon, Apple and WarnerMedia, Netflix is being chipped away at from many sides.
Many stock analysts spoke with Deadline about how they reacted to the Disney+ event:
“Truth be told, most investor days don’t live up to the hype and this one had the potential to be disappointing. Disney had set a high bar of expectations and rose to the challenge. Surprisingly, the company shared a tremendous amount of DTC financial metrics including subscriber and profit guidance. With very impressive slate of new content and catalog titles. The disclosure of the low price point generated a collective gasp in the room. The service, which also will include The Simpsons and an incredible slate of new Pay 1 movies, looks like a bargain compared to other entertainment options.”
Wrote Michael Nathanson of MoffettNathanson
“We believe Disney+ is positioned to see very fast early adoption due to its extremely low price, compelling content, and strong brand recognition. With management having put a stake in the ground for its DTC initiatives, we think this will likely set the stage for improving sentiment.”
Said Cowen & Co.’s Doug Creutz.
“Disney is approaching streaming offerings with guns blazing, looking to take share and quickly ramp up subscriber growth. Disney+ will be loaded on Day One with attractive IP and franchises, and has set the price very affordably at $6.99 per month, well below other premium SVOD offerings.”
Said Patrice Cucinello, director of the technology, media and telecom group at credit-rating firm Fitch Ratings.
Time will tell if Disney has made the right move with Disney+, but the investor reaction was what the company wanted.