One of the biggest reasons Disney is refocusing its business on streaming, is how traditional TV viewing has changed and subscribers have been cutting the cord to go to other platforms like Netflix. Netflix currently has nearly 138 million subscribers worldwide, which includes 80 million international subscribers.
With Disney set to launch their own service, Disney+, in late 2019, investors are keen to know how many customers Disney stands to win.
In a recent article on Barrons, early predictions for the total number of subscribers were revealed:
Based on demographic data from 45 countries, Evercore ISI analyst Vijay Jayant estimates that the total addressable market for internet TV is 760 million households worldwide—ones that can afford a $9 a month service and can support streaming requirements. Some 240 million of these are well-off enough to afford a Disney service even if they already have one from Netflix. He projects that Disney+ will attract 20 million domestic subscribers in its first five years, plus nearly 35 million international ones, resulting in about $5 billion in revenue by 2024, with the venture turning profitable that year.
That’s a total of 55 million subscribers internationally within 5 years, it also shows how Disney is in it for the long haul, saying that it will take 5 years for Disney+ to make a profit.
This might affect Disney’s stock price for years to come, which Bob Iger has said
“We’re looking for Wall Street to show some patience. While I won’t say they’re cheering us on, they’re definitely giving us the room to prove that we can do it.”
When that number is compared to today’s current Netflix subscribers, it doesn’t look as impressive, but in 5 years time, Netflix won’t have the same market share, due to increased competition from Disney, Warner, Comcast, Amazon and others.
The stats from this analyst also only state 45 countries have been included in the data, which is only a quarter of the countries in the world, so those international subscribers could be higher if Disney manages to launch their platform everywhere.
Do you agree with the stats from Evercore ISI analyst Vijay Jayant?