Walt Disney (NYSE:DIS) blew away all expectations with its Disney+ streaming service, both its own and those of analysts. Subscriber counts the entertainment giant thought it would take years to reach occurred in just months.

Certainly the COVID-19 pandemic played a role in supercharging the numbers, as did the free trials Verizon offered for its subscribers and the low monthly subscription cost. But other services that also launched around the same time as Disney+ that enjoyed similar advantages didn't experience the same level of adoption among consumers.

Now, Disney+ is on target to catch up to and potentially surpass Netflix (NASDAQ:NFLX) as soon as next year.

Baby Yoda character from The Mandalorian Star Wars series

Image source: Disney.

Running up the score

A lot of credit for the recent streaming growth belongs to the Star Wars spinoff series The Mandalorian, an episodic Western space drama serial that goes back to the roots of the movie franchise and pays homage to the classic storytelling that endeared the original films to millions of fans.

Yet Disney also has a massive movie and TV show library it was able to tap into, including content more often than not geared toward children, which proved vital with families stuck at home during lockdowns and with movie theaters closed.

All of that is translating into impressive subscriber growth, even as Netflix sees its momentum slowing. The streaming pioneer also saw a spike in new subscriber additions early on in the pandemic -- it added 25.86 million new accounts in the first half of 2020, almost as many as it added for all of 2019. However, that growth slowed to a trickle in the third quarter when Netflix added just 2.2 million subscribers, and only 177,000 were in the U.S.

That happened even as Disney+ grew from 33.5 million subscribers in the second quarter to 57.5 million in the third. Over the next few years, Disney could very well surpass Netflix to become the leading name in streaming. And in terms of revenue, Disney could take the No. 1 spot as soon as 2022.

Disney+ and Hulu are a powerful combination

eMarketer forecasts Disney+ streaming revenue in the U.S. will grow from $1.94 billion at the end of 2020 to $4.23 billion by 2022, aided by the $1-per-month price increase that will take effect in March.

At that point, revenue will still be shy of the $12.95 billion eMarketer expects Netflix to generate next year, but let's not forget the other pieces of Disney's streaming operation. Adding Hulu and ESPN+ to the mix, Disney could generate an estimated $12.36 billion in streaming revenue, well within striking distance of the No. 1 spot.

While Disney+ has been wowing investors with its rapid growth, Hulu actually accounts for over 67% of the company's streaming revenue. It will be the combination of Disney+ and Hulu that eventually puts Disney over the top.

Why it might not pan out

Actual subscriber numbers for Disney+ alone will take a bit longer to catch up to Netflix. eMarketer estimates that by 2024, Netflix will have 182.2 million U.S. subscribers with Disney+ growing to 123.4 million. Looking further ahead, it's easy to see how Disney+ might become the top dog within the next decade.

But there are factors that could impact those projections. For example, if movie theaters are able to reopen and operate again with a decent slate of big-budget films to bring in moviegoers, that would likely hurt demand for streaming content.

AT&T is also making a big push to have its HBO Max service be even more of a viable streaming alternative. Its Warner Bros. studio will be releasing its entire 2021 slate of films direct to the streaming service on the same day they show up in theaters. That could attract more subscribers to HBO Max, though Disney has promised to release a slew of feature films to Disney+ as well.

Battle for supremacy

Analysts have suggested consumers have an appetite and budget for only two or three streaming services to supplement their viewing habits. Netflix has long been a given, and the same goes for Amazon Prime Video since it's included with the Prime membership.

That left the rest of the field fighting for the next one or two spots, but it seems that sooner than anyone expected, it will be Disney sitting atop the streaming video industry.