Walt Disney (DIS -1.38%) is having remarkable success with its entry into the streaming business. Disney+ launched in November 2019 and has quickly amassed a subscriber base of over 100 million. And while its main competitor, Netflix, is experiencing a slowdown in subscriber growth, Disney could continue gaining ground.
This quarter may be an especially good one in terms of subscriber additions for Disney+. Let's take a look at the confluence of factors that explain why that might be so.
Disney+ is a relatively new service, and the House of Mouse is only in the early stages of expanding across the globe. With each new country it enters, Disney+ attracts new subscribers. Just this month, the service expanded into two countries with a total population over 100 million: On June 1, it expanded into Malaysia, a market of 32 million people, and on June 30, it will follow in Thailand, home to nearly 70 million people.
Furthermore, Disney+ is available in India as Disney+ Hotstar, a popular combination of Disney's media and local, regional content. Here's what Disney CFO Christine McCarthy said to investors about the service in the second-quarter conference call: "Between Q1 and Q2, Disney+ Hotstar was the strongest contributor to net subscriber additions, making up approximately one-third of the total Disney+ subscriber base as of the end of the second quarter."
And while the U.S. is experiencing a substantial decline in coronavirus cases and easing of business restrictions, India is still in the thick of the battle against COVID-19. The country went through the most difficult phase in its battle in the past several months, with infections, hospitalizations, and deaths reaching record levels. As we saw in the U.S. in the most acute phases of the pandemic, lockdowns lead to a surge in demand for in-home entertainment. That could have led to millions of more subscribers signing up to Disney+ from India.
Content is king
Disney is known for some of the best entertainment properties in the world, and it's certainly not holding out on its streaming platform. Disney+ is receiving a treasure trove of films and series on an ongoing basis, the pace of which will increase as COVID-related restrictions on production ease. This quarter specifically, Disney+ made several popular titles available to subscribers.
Disney's Raya and the Last Dragon became available for free to existing subs after a period in which it was available for purchase at $29.99. The movie grossed $133 million at the box office, and undoubtedly some viewers are looking forward to watching it.
Similarly, Disney's Cruella became available in theaters on May 28 and on Disney+ for $29.99. Estimates suggest nearly 700,000 households paid for the privilege to stream it in the film's opening weekend alone. Those figures have likely increased since then, and certainly, some folks were new to Disney+ entirely.
On June 18, Disney will release Pixar's Luca exclusively on Disney+ for free to subscribers. The buzz and interest around the new Pixar film could further fuel subscriber additions.
Finally, the company recently premiered its latest entry in the Marvel Cinematic Universe, Loki. The third Marvel original series to be released on the platform scored the highest in first-day viewership, with an estimated 890,000 households tuning in.
Indeed, international expansion, the resurgence of COVID-19 in India, and a slate of exciting new content are likely to have added millions of new subscribers to Disney+ this quarter.