UPDATED with closing stock price, analyst comments: Disney stock soared more than 6% to an all-time high after the company revealed Wednesday that its new streaming service, Disney+, has already drawn 10 million sign-ups.
That number, which the company ascribed in a press release to “extraordinary consumer demand,” may help explain why the service experienced widespread outages after launching early Tuesday. The glitches, which the company attributed to unexpectedly high interest that overloaded its technological infrastructure, diminished over the course of the opening day.
While 10 million sign-ups does not equal 10 million subscribers given that Disney has offered promotions including a free 7-day trial, Cowen & Co. analyst Doug Creutz called it a “very strong start” in a note to clients. Disney stock rose to just shy of $150 a share before closing Wednesday at $148.72 on five times its normal trading volume. Netflix, meanwhile, dropped 3% to $283.11. Stock movement overall was generally modest, with the Dow rising a fraction and the S&P 500 and Nasdaq both essentially flat.
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The Day 1 figure pushes Disney toward the high end of its own projections for 60 million-90 million streaming subscribers globally by 2024. (Netflix has about 158 million global subscribers, with 60 million of them in the U.S.) The $7-a-month service launched Tuesday in the U.S., Canada and the Netherlands with a library of film and TV titles from Marvel, Lucasfilm, Pixar and National Geographic. It is also featuring new, original shows like The Mandalorian. It will arrive in Australia and New Zealand next week and the UK and Western Europe on March 31.
“We expect pay conversion will be a high percentage of these initial sign-ups,” Creutz wrote. “The 10 million sign-ups took the affirmative action to opt in to the service on the very first day it was available. We continue to think the consumer decision to subscribe/not subscribe to Disney+, particularly for families, is pretty clear-cut with its compelling content price-point and strong brand recognition, and given Disney’s overwhelming marketing push for the product we continue to think the adoption curve is likely to be faster than any other OTT service to-date.”
Dan Ives of Wedbush called the opening number “eye-popping” proof of the “unmatched content and a massive brand/distribution that makes the House of Mouse a legitimate streaming competitor on Day One” to Netflix.
Earlier Wednesday, the research firm Apptopia released its own estimate of 3.2 million downloads of the Disney+ app on iOS and Android. But those environments are just a minority of the total footprint of Disney+, with the service also available for free for the first year to most Verizon wireless subscribers in the U.S. It can also be accessed via Samsung smart TVs, Roku and Amazon Fire TV as well as Disney’s own website.
Another variable is the offer of a bundle, with Disney+, ESPN+ and Hulu’s basic tier. Disney has not shed any light yet on how many of the 10 million sign-ups may have opted for the bundle.
The press release noted that it will likely be the last time for a while that Disney reveals any streaming data. “Moving forward, there are no plans to release Disney+ subscriber data outside of The Walt Disney Company’s quarterly earnings calls,” it said. The next call has not been scheduled, but will likely be held in February.
Disney+ has plenty of competition, though, and not only from Netflix. Apple just launched the $5-a-month Apple TV+ and WarnerMedia and NBCUniversal will debut HBO Max and Peacock, respectively, next spring.