Disney's (NYSE:DIS) new streaming service is a hit, and you don't need to take your social media news feed that's blowing up with Disney+ mentions as proof. More than 10 million people have signed up for the content-stacked video platform.
Shares of Disney have moved nearly 6% higher in the four trading days since Tuesday morning's launch of Disney+, but that's child's play next to Roku (NASDAQ:ROKU). The streaming media pioneer's stock has soared 22% over the same time and has moved higher for six consecutive trading days, skyrocketing 33% overall in the process. Roku could be the the better Disney+ play than shares of the media giant itself.
Turning the "plus" sign into multiplication
Roku's rise isn't all tied to the hot launch of Disney+. The stock took a big hit after Roku posted mixed financial results just before the seven-day run, so the recent ascent comes off what some would consider to be depressed levels. However, there's no mistaking that a strong Disney+ is ultimately great news for Roku.
Roku's operating system has established itself as the platform of choice for smart television manufacturers. Sales are also picking up for its dongles and devices that folks are buying to get their TVs up to speed for the streaming revolution. There are now 32.3 million active accounts on Roku, 36% more than a year earlier. This metric takes us through the end of September -- weeks before the Nov. 12 launch of Disney+ -- but this sets the stage perfectly for what should be a huge holiday quarter for Roku's platform growth.
A hot new service does a lot of interesting things for Roku. For starters, Roku generates revenue by promoting the thousands of apps it makes available on its hub, and it's a lot more lucrative for Roku to get folks to sign up for a new offering on its hub than dealing with users who enter the Roku ecosystem while they have pre-existing relationships with older streaming services. With Disney+ and other new services hungry to get noticed, it's fair to say that the future will be bright for Roku as a gatekeeper.
There's also something to be said about a streaming universe with a lot of successful apps. Greater variety among the victors in this space will make it easier for folks to cancel their cable or satellite television accounts, pushing them right to Roku's front door. A larger number of popular services will also increase switching costs, weaving folks deeper into the platform.
Disney needs Disney+ to be a hit. Roku succeeds either way. Disney may be the blue chip stock between the two, but Roku is the one in a win-win position. The revolution is happening, and it will be streamed.