Please ensure Javascript is enabled for purposes of website accessibility

Disney, Netflix, and Roku Win With 28.6 Million Disney+ Subscribers

By Rick Munarriz - Feb 6, 2020 at 10:30AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Disney+'s momentum has slowed in the past five weeks, but that's good news for the media giant and some of its peers.

Disney (DIS -1.31%) is off to a blazing start with its new premium streaming service. The media giant's earnings release on Tuesday afternoon revealed that Disney+ closed out the holiday-season quarter with 26.5 million paying subscribers. Disney would go on to reveal that it had 28.6 million paid subscribers as of early this week. 

There are several ways to read that current figure. Ultimately Disney at 28.6 million right now is good news for Disney, rival Netflix (NFLX -1.96%), and even platform provider Roku (ROKU -5.71%). Let's examine why this could be a win-win-win for the three streaming media powerhouses. 

A Disney Channel show featuring a young band performing.

Image source: Disney.

Disney slows but grows

On the surface it may seem as if Disney+ is losing momentum. It landed 26.5 million subscribers in just its first seven weeks of availability, only to grow its audience by just 2.1 million more in the subsequent five weeks. 

However, just the fact that the figure is rising is encouraging. The last of The Mandalorian episodes for the first season came out in late December, and absent a similar original hit, it was easy to wonder if folks would stick around. For now Disney+ is winning that battle. Its relevance will grow alongside its audience. 

Netflix can fight back

The leading streaming service lost out to Disney+ and understandably so. Netflix grew its subscriber base by 8.76 million during the final quarter of last year. Disney+ nearly tripled that audience growth and it was only available for a little more than half of the quarter. 

The pace slowing at Disney+ to a mere 2.1 million gain through the first month and change of the current quarter is interesting. Netflix is targeting 7 million self-pay net additions, so barring a late push for subscribers at Disney, it seems as if Netflix will win out over Disney+ this quarter. 

Roku rocks

Having Disney+ run away with the premium streaming market would've hurt Roku. The fast-growing platform operator thrives when there's competition among several viable services, as it collects more ad revenue and referral fees that way. 

Disney was doing fine on its own. Roughly half of the Disney+ subscribers signed up directly through the media giant, according to CEO Bob Iger, and another 20% were coming in through its one-year promotional offer for Verizon wireless customers. There's nothing wrong with fighting for the other 30% with every other third-party platform, but life is better when there are several players shelling out big money to reach Roku users. A slow-growing Disney+ is perfect for Roku. It also works for Disney itself and Netflix. Streaming media is going to be a big theme for investors in the next few years, and Disney, Netflix, and Roku are among the top stocks to ride the wave.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Netflix, Inc. Stock Quote
Netflix, Inc.
$174.87 (-1.96%) $-3.49
The Walt Disney Company Stock Quote
The Walt Disney Company
$94.40 (-1.31%) $-1.25
Roku Stock Quote
$82.14 (-5.71%) $-4.97

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/01/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.