Disney passes 10m streaming sign-ups in one day

November 15, 2019
November 15, 2019 Tumelo Moloi
Barcelona, Spain. October 2019: Close up view of Disney plus on smartphone screen. Disney plus is an online video streaming subscription service, set to launch in the US in 2019.Illustrative editorial

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Walt Disney said on Wednesday that more than 10m people have signed up to its new video streaming service, only a day after its launch, wowing investors and sending its shares higher.  The company, the largest media group in the world, did not specify how many of the 10m were signing up to free trials for its Disney+ service, but the number was higher than Wall Street analysts had expected.  Daniel Ives, analyst at Wedbush Securities, called the figure “jaw-dropping”.  “This speaks to the one-two punch of success that [chief executive Bob] Iger and Disney have coming out of the gate,” he said, noting that its “unmatched content . . . makes the House of Mouse a legitimate streaming competitor on day one to Netflix”. Shares in Disney jumped more than 6 per cent in afternoon trade in New York, while streaming rival Netflix’s stock dropped more than 2.5 per cent.  Mr Iger has bet Disney’s future on an expensive gamble on video streaming, investing billions of dollars in content and technology to beef up a new service that it hopes will make it a large player in the market dominated by Netflix.  It has entered a crowded market: as well as Netflix, Disney is competing with Apple, Amazon and traditional media groups WarnerMedia and NBCUniversal. Netflix already has 60m US subscribers, while the rival service Hulu, which Disney controls, has 28m.  But it took Netflix more than two years to gain its first 10m subscribers — underscoring the strength of Disney’s early results.  Disney+ offers a library content anchored by the company’s popular franchises: Marvel, Star Wars, Pixar and Disney. Disney has also been working to make fresh shows that will tantalise fans, including The Mandalorian, a Star Wars spin-off series that cost $100m to make.  The service is priced relatively cheaply: at $7 a month, it is less than half the price of a standard Netflix subscription. In an effort to increase subscriptions, Disney is offering a free seven-day trial and also struck a partnership with Verizon, the largest US phone provider, which offers a free year of Disney+ to customers of its unlimited data mobile plans.

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Disney said it would not release further updates on streaming subscriptions outside of quarterly earnings results. The company last week reported its adjusted quarterly earnings had dropped almost 30 per cent from a year ago, while total costs in the quarter climbed to $16.8bn, up 50 per cent from a year ago. The Disney+ streaming service has so far launched in the US, Canada and the Netherlands, with plans to enter Australia later this month, and western Europe in March. 

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