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Disney+ Launch Lands Positive Reception From Analysts

Analysts were impressed with the initial consumer response to Disney+, but the streaming service will need to maintain its momentum in a crowded market.

Kevin Mayer, Disney's chairman of direct-to-consumer products, at D23. Disney+

Kevin Mayer, Disney’s chairman of direct-to-consumer products, at D23 in 2019


The promise of a Mandalorian bounty hunter and decades of classic Disney programming were more than enough to get millions of viewers to sign up for Disney+ during the service’s bustling launch week, matching early optimism for the latest streaming addition.

Analysts were quite optimistic about Disney+ in the months leading up to last Tuesday’s launch, and early data suggests their bullishness was warranted: Disney said there were 10 million signups for the company’s new streaming service within a day of its launch. The company’s stock jumped up around 7 percent after the announcement and has stayed relatively steady since.

That said, the Disney statistic is presumably inflated by seven-day free trial accounts and also includes signups from the various promotional deals Disney has offered over the last few months. Those deals include a discounted three-year subscription and gifting a free year of the service to Verizon customers with the carrier’s unlimited data plan.

Still, it appears a significant number of subscribers will continue paying for the service, and its week one hype is a positive sign for Disney going forward, according to Dave Heger, a senior equity analyst at Edward Jones.

“10 million subscribers in the first day beat everyone’s expectations,” Heger said. “There’s questions about the actual dollar value of those subscribers because a number of them are Verizon customers who are getting it for free, and the seven-day free trial people also have it, but the amount of buzz there has been bodes well for the longer term. The challenge will be to keep bringing out hits that excite people and get them talking.”

Disney may share more detailed information about subscribers to its streaming service in the company’s next earnings report, but in the meantime, social media buzz makes it clear that the platform is quickly gaining traction. Social analytics company ListenFirst tracked Disney+ engagement across several social media platforms throughout the week

There were around 1.28 million tweets regarding Disney+ within a day of the service’s launch, according to the company’s provided data. The firm tracked Disney+ engagement across several social media platforms throughout the week and reported that millennials constituted 70 percent of social media’s Disney+ discussions, followed by Gen X at 19 percent. The audience skewed slightly male, at 54 percent.

Disney+ conversations varied on each social media platform: “The Mandalorian” dominated YouTube, Instagram users flocked to posts about Marvel’s television projects, and Facebook users were most interested in the new live-action version of “Lady and the Tramp,” according to ListenFirst data.

It’s crucial for new streaming services to hit the ground running, given how competitive the market is, according to ListenFirst co-founder Jason Klein. He noted that the unique reactions to Disney+ content on different social media platforms reflected well, as it means the streaming service is offering enough content to appeal to a variety of viewers.

“Fans are fickle, especially with so many choices out there, so that first window of time to convert someone to Disney+ is important and Disney clearly did a lot in that short window,” Klein said. “It’s fascinating to see three different social platforms with three different resonances to Disney+ content. With access rights to Marvel and ‘Star Wars’ and catalogue stuff like ‘Lady and the Tramp’ there really is something for everyone.”

Disney isn’t sharing viewership numbers for any of its Disney+ titles, but there’s little doubt that “The Mandalorian” has been in high-demand. That bodes well for the streaming service as new episodes of “The Mandalorian” continue to release, but the show will stream its season finale on December 27. Though original comedy series “Diary of a Female President” and “Star Wars: The Clone Wars” Season 7 will hit the platform in January and February, respectively, “The Falcon and the Winter Soldier,” the next tentpole Disney+ title, is still about one year away.

The Mandalorian Taika Waititi Disney Plus Episode 1

“The Mandalorian”


Although Disney will drip feed some big-name legacy content onto the platform over the next few months — such as “Black Panther,” “Star Wars: The Last Jedi,” and “Incredibles 2” — the service will nonetheless see a lengthy gap between its new releases.

That’s hardly an insurmountable issue, but it’s one that Disney will need to overcome through strong marketing, according to Andy Hargreaves, an equity research analyst at KeyBanc Capital Markets. Hargreaves argued that Disney+ will benefit from Disney’s historically strong publicity engine. He added that Disney had a unique advantage in the streaming business due to its strong IP and existing customer base. Pixar, the Marvel Cinematic Universe, and Star Wars are already universally beloved brands, and having most of their content on Disney+ makes the streaming service an easy sell for many consumers, original content notwithstanding.

“They have brands that give them access to family and younger audiences that other streamers lack,” Hargreaves said. “That is a valuable audience because they tend to have a lot of free time to watch shows and buy merchandise related to those brands. Interest around ‘The Mandalorian’ and the general Disney+ brand has been good and now the trick will be to keep those people engaged and continuing to pay.”

Disney may have “Star Wars” and Marvel in its arsenal, but the company’s new streaming service will still have to contend with an increasingly crowded market, as WarnerMedia’s HBO Max and NBCUniversal’s Peacock streaming services are set to launch in the first half of 2020. HBO Max will take advantage of WarnerMedia and AT&T’s similarly expansive roster of legacy content, while Peacock will release a new “Battlestar Galactica” series and a “Saved by the Bell” reboot, among other original projects.

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