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Disney Shares Hit Record on Forecast of Streaming Surge
Posted
December 11, 2020
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December 11, 2020
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6:18Now PlayingWalt Disney Co. shares hit an all-time high after it issued a bold forecast for its new streaming services, projecting a Netflix-like trajectory that could bring the company as many as 350 million subscribers worldwide by 2024 thanks to an onslaught of programming from Marvel, Star Wars and Pixar.
In a presentation to investors Thursday, the world’s largest entertainment company outlined plans for dozens of new movies and TV shows from those major brands, with an eye toward becoming a streaming behemoth in four years. The company expects its program spending to reach $14 billion to $16 billion annually by then.
Disney+, the entertainment giant’s flagship streaming platform, also is getting a price hike. The U.S. monthly rate will climb $1 to $8 in a move that executives telegraphed earlier this year. In Europe, the price will rise 29% to 9 euros ($11) a month, although there it is getting additional content aimed at adults.
Shares of Disney rose as much as 11% to a record $171 in New York trading Friday. The stock has about doubled since March on the strength of the streaming business.
“The enormous success of Disney+ inspired us to be even more ambitious,” Executive Chairman Bob Iger said at the event. “Our pipeline is much more robust than we initially anticipated,” he said, adding that the Disney+ cadence should soon hit 100 new titles per year.
Disney, like other Hollywood studios, is reorienting its film and TV business toward home entertainment, and has leapfrogged many competitors with its fast subscriber growth. Yet with its new subscriber goals -- including hopes for as many as 260 million Disney+ customers -- the company would surpass where industry pioneer Netflix Inc. is today.
As part of the presentation, Chief Executive Officer Bob Chapek said Disney+ has soared past 86.8 million subscribers in a little over a year. The company closed the last quarter with almost 74 million.
Disney executives, including new distribution head Kareem Daniel, outlined aggressive plans to stock the Disney+ service with new programming to keep the subscriber pipeline growing over the next few years. The Covid-19 pandemic forced many Hollywood studios to slow production this year.
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