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Why Disney + could go from strength to strength in the near future

Walt Disney (NYSE: DIS) reported its Q1 2020 results on Tuesday and it can be safely said that the highlight of the entire report was Disney + and the subscriber base garnered by the new service. The company stated on its quarterly conference call that the launch of Disney + was enormously successful, exceeding its greatest expectations.

Disney +, which gained over 10 million sign-ups on the first day of its launch in November, ended the quarter with 26.5 million paid subscribers. The latest number stands at 28.6 million. The company also saw better-than-expected rates for conversion from free to pay and churn.

Walt Disney reports Q1 2020 earnings results

Disney + has, for long, been touted as a formidable opponent to Netflix (NYSE: NFLX) and from the looks of it, this could very well happen. Disney has several factors in its favor, the first being its brands and content.

As has been touched upon several times in the past, Disney has a vast trove of content which includes some of the most popular franchises such as Toy Story, Star Wars, Avengers and Frozen. This alone has the ability to attract and retain a large number of viewers. The company’s slate of original content, which includes shows like The Mandalorian, is also playing a significant part in wooing the audience.

The next point to note is the streaming service’s scope for international expansion. The company has termed this as its next big priority. In March, Disney + will be launched in India as well as in Western Europe in regions including the UK, Ireland, France, Germany, Spain, Italy, Switzerland and Austria. This will be followed by Belgium, the Nordics and Portugal in the summer.

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Also read: Walt Disney Q1 2020 Earnings Report

In December, Disney signed a deal with France’s pay-TV provider Canal + and the company is in discussions with other potential distribution partners in the region. Disney + will be launched in India through the Hotstar service, with the Hotstar VIP and Premium subscription tiers being rebranded to Disney Plus Hotstar.

The launch, which will take place at the beginning of the Indian Premier League Cricket season, is expected to be vastly beneficial. The company sees great potential in India, which has a large population and is one of the fastest-growing economies in the world. In the near-term, Disney expects subscriber growth to come mainly from outside the US.

All in all, Disney + appears to be going from strength to strength and it might not come as a surprise if the streaming service overtakes Netflix at some point in time going forward.

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