Disney (NYSE:DIS) has been through one of its most tumultuous years ever in 2020. Theme parks were closed, movies were delayed or released directly to customers, and legendary CEO Bob Iger stepped down, although he remains at the company in an executive chairman role. 

But there were some bright spots for Disney as well, and by mid-2021 it's likely the pandemic that upended the world will start to pass. And that could change what we should expect from Disney next year. 

Baby Yoda from The Mandalorian peaking around a corner.

Baby Yoda from The Mandalorian. Image source: Disney.

Parks and experiences will make a comeback

The biggest change to look for in 2021 is a potential recovery for Disney's parks, experiences, and products business. In fiscal 2020, revenue from this segment was down 37% to $16.5 billion, and the operating loss was $81 million, versus $6.8 billion in operating profit a year ago. But that doesn't even show the depths of the pandemic's impact. In the fiscal third quarter, which ended on June 27, parks revenue was down 85% to $983 million, and the operating loss ballooned to $2 billion.

We don't know at what pace parks and experiences revenue will return, but I think it's likely customers are champing at the bit to make up for lost time at entertainment venues like Disney's. If the COVID-19 vaccine is as effective and widely distributed as hoped, by the end of 2021, the parks business may be back to pre-pandemic levels of revenue and earnings, which is icing on the cake considering Disney's relatively new streaming business.

Disney+ matures to a real business

By any measure, Disney+ has been a smashing success in the world of streaming. A little over a year after launch, the service has 86.8 million subscribers, and that's before a flood of content announced to investors last week. In the next few years, there will be dozens of original series added to the service, and expectations are that will make this one of the biggest streaming services in the world.

As new original content is added, I see Disney+ maturing into a best-in-breed streaming service from its starting point as a library dump of Disney's catalog (as compelling as that was). 

Let's just do some back-of-the-napkin calculations on how impactful Disney+ could be. According to Disney's recent presentation to investors, management is expecting between 230 million and 260 million Disney+ subscribers by the end of 2024. The service's price will increase to $7.99 per month in March 2021, translating into approximately $22.1 billion of incremental revenue each year at the low end of that target range -- and that's not including Hulu, ESPN+, international services, or any revenue adders that Disney has introduced. Remember, this is a brand-new business, so it's possible it's almost entirely additive to the $65.4 billion of revenue Disney generated in fiscal 2020. 

ESPN's transition needs to take hold

One place where I'm expecting big changes in 2021 will be ESPN. The company's sports arm has long been a cash cow, but that has changed in recent years as consumers cut the cord and the cost for ESPN to sign big sports licenses has increased. In 2020, subscriber losses continued to mount and management has taken to cutting costs, but that's just the start of changes at ESPN.

The Disney+ success provides a path for ESPN and the aptly named ESPN+ in 2021. The sports streaming service is currently a niche add-on to ESPN with UFC pay-per-view fights, 30 for 30 content, and some live events. But it's hardly the future of sports viewing, and I think that will begin to change in 2021. 

We've seen that Disney can attract tens of millions of viewers to streaming, and with 11.5 million subscribers, ESPN+ has a solid start. But as cable and licensing deals lapse, I think we'll see streaming services like this begin to gather their own content, and no sports network has as much incentive to make streaming work as ESPN. I could also see it move some high-profile talk shows to the streaming service and off of ESPN channels, another way to draw customers. 

Disney needs to figure out the future of ESPN and do so before someone else builds a streaming sports giant. I think we'll see that transition take place in 2021 with ESPN+ getting a lot more investment and attention than it did in 2020. 

Disney's digital future

This year showed that Disney's future is as a more digital, direct-to-consumer business, and no legacy media company is as prepared to make that transition. Next year, I think that transition will accelerate with Disney+ maturing and changes likely at ESPN and ESPN+ as well. But parks will also be back, providing another source of highly profitable revenue. And that's the kind of full recovery that will help the stock in 2021 and beyond. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.