Disney+ has officially hit the ground running. After presenting the quarterly earnings report, Walt Disney Company chairman Bob Iger told investors on Tuesday that the streaming service had 26.5 million paying subscribers by the end of Disney’s latest fiscal quarter — and added an additional 2 million subscriptions in January alone.
Perhaps even better than those great numbers is the timing: Disney+ customers won’t have to wait long for the first Marvel Cinematic Universe-branded shows to hit the platform. “Falcon and the Winter Soldier” will premiere in August 2020, while “WandaVision” will hit the streamer in December. Meanwhile, “The Mandalorian” and the adventures of Baby Yoda — which helped lift subscriber totals beyond even the most optimistic analyst projections — will resume when Season 2 hits Disney+ in October.
As it stands, Iger said the service had 28.6 million paid subscribers as of Monday, February 3, 2020. Disney’s stock was up 2.41 percent at press time.
The company’s streaming service launched with “The Mandalorian,” a “Star Wars” spinoff series that immediately became one of 2019’s most-discussed television shows. Disney+ also boasts a large library of older, highly-recognizable films and television series, including releases from key brands such as the Marvel Cinematic Universe, “Star Wars,” Pixar, and National Geographic.
Analysts were predominantly optimistic about Disney+ in the weeks leading up to and following the service’s launch. Their most recurring questions were whether Disney would be able to maintain the momentum Disney+ enjoyed — Disney said there were over 10 million signups for the service within a day of its launch — during its launch period in the long-term, and the company’s new slew of release windows for its most-anticipated upcoming projects suggests that the Disney is on track to do so.
“Falcon and the Winter Soldier,” “WandaVision,” and “The Mandalorian” all have significant mainstream appeal and Disney has already announced a variety of other shows with preexisting brand awareness, including “Loki” and “Hawkeye,” that should keep Disney+ relevant in the coming years. The service’s recognizable franchise content and family-friendly bent makes it distinct from most of the market’s competing streaming services. Disney+, which costs $6.99 per month and can be bundled with ESPN+ and the ad-supported version of Hulu for $12.99 per month, is also cheaper than most competing services.
While Tuesday’s earnings report bodes well for Disney+, it raises questions about Hulu. Disney said that the acquired streaming giant closed the quarter with around 30.4 million subscribers (up from 22.8 million subscribers one year ago), which means that the aging service has nearly been outpaced by a platform that is only several months old. Disney has also been restructuring Hulu since acquiring the company last year, which has raised questions about how the platform will stand out as Disney continues to invest in its other TV ventures, including Disney+, FX, and ABC.
Help is on the horizon: The company’s “FX on Hulu” initiative, which will bring the network’s new and existing shows to Hulu, is part of an effort to revitalize both brands, but only time will tell if Hulu’s slow subscriber growth relative to Disney+ will cause Disney to reexamine the legacy streaming service.
As for how these numbers effect the streaming wars, previous reports suggested that the early success of Disney+ was cutting into Netflix’s subscriber base: A December Cowen report said that around 1 million of Netflix’s U.S. subscribers cancelled their subscriptions to sign up for Disney+. The Cowen report also estimated that Disney+ had 24 million U.S. subscribers by the end of November.
Disney+ launched around the same time as Apple TV+, the Apple-run streaming service that launched with the Jennifer Anniston and Reese Witherspoon-led “The Morning Show.” Apple TV+ has not enjoyed as warm a reception as Disney+ and Deadline recently reported that fewer than 10 percent of eligible Apple customers have taken advantage of Apple TV+’s one-year-free promotional offer. Apple has not released subscription numbers for Apple TV+.
Disney’s Q1 earnings were announced a few months before the May and June launches for WarnerMedia’s HBO Max and NBCUniversal’s Peacock streaming services, respectively. While those platforms are expected to make the streaming television market more competitive, analysts have not been quite as optimistic about them as they were for Disney+. Neither service has revealed its slate of launch originals, and questions remain about their branding and value propositions. AT&T, which owns WarnerMedia, recently reported that HBO Max investments reduced its revenue by $1.2 billion in the company’s latest fiscal quarter, sending stock downwards.