Walt Disney (DIS 1.34%) is hitting all-time highs this week, so it had quite a bit to live up to heading into its Investor Day 2020 event shortly after Thursday's market close. There were plenty of questions ahead of the presentation, and the market liked the answers.
The big takeaways from the event are that Disney is pumping a lot of content into Disney+, jacking up its long-term forecast dramatically, and raising prices in March. We'll get to these buzzworthy revelations shortly. Let's go over the answers to two questions I was asking earlier this week, and then bring it all home with the event's exclamation points.
Image source: Getty Images.
1. Disney+ is up to 86.8 million subs
When it was revealed during last month's earnings call that Disney's head-turning streaming service had reached 73.7 million paying subscribers in its first year of availability, it was easy to wonder if we had hit peak Disney+. With so many accounts on discounted (and in some cases complimentary) one-year plans expiring on Nov. 12, would international growth help pick up the slack?
Well, CEO Bob Chapek kicked things off on Thursday afternoon by announcing that Disney+ was up to 86.8 million subs as of Dec. 2. Even if this number is increasing as a result of international growth, where some viewers are paying less than U.S. members, there's no denying that Disney+ is not a one-hit wonder. It's survived the first-year's retention challenge. Disney+ is here to stay.
2. Disney's studio isn't following WarnerMedia's lead
AT&T (T +0.85%) sent jaws dropping to the floor recently by announcing that every single Warner Bros. movie slated for a theatrical release in 2021 will also stream on HBO Max at the same time for no additional cost. Would Disney follow in AT&T's footsteps? After pulling Mulan and Soul from theaters, it made the former a premium digital offering for folks willing to pay $30 for three months of access before the film became available on Disney+. Soul will be included with the streaming service later this month.
Disney's Investor Day finds the media giant continuing to take several different approaches with its feature films, unlike AT&T's one-size-fits-all approach to 2021. Raya and the Last Dragon will hit Disney+ as a premium offering for folks paying $30 -- just like Mulan back in September. However, it will also be available at a multiplex near you.
Disney also mentioned that some films will hit theaters first, and some will be exclusive to Disney+. It's not as if the streaming service will be smarting for content. Disney also announced that it's working on 10 different Star Wars and 10 different Marvel series that will debut on Disney+ in the coming years. It will also make 15 Disney and Pixar animated shows and feature films that will come directly to Disney+.
3. Disney+ is just getting started
Disney's forecast last year calling for a paying audience of 60 million to 90 million Disney+ subscribers by 2024 grew stale just months into the platform's tenure. The company finally updated its forecast near the end of Thursday's four-hour event. It now sees 230 million to 260 million premium members by the end of fiscal 2024. Disney also boosted its guidance for Hulu and ESPN+, now targeting 300 million to 350 million subscribers for all three streaming platforms come 2024.
The bigger near-term boost will come from higher monthly rates for the service. Disney+ pricing will go from $6.99 to $7.99 a month in the U.S. in March. The 14% increase will help bankroll the onslaught of content in the works.
Disney+ still isn't expected to turn a profit until fiscal 2024, but with the kind of growth that the company is now projecting for its streaming platforms, a little red ink isn't going to get in the way of the bullish rally. The media stock will continue to hit fresh all-time highs.
