‘All Systems Go’ – How Big Can Disney Streaming Really Grow?

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Disney Plus future

As The Walt Disney Company and investors look to 2021, Disney+ and direct-to-consumer streaming continue to be in the spotlight.

While the future already looks bright, Wells Fargo’s Steven Cahall takes his optimism a step further, especially in regard to where Disney can take its streaming business.

“Chuck the divi [dividend] torch EPS [Earnings Per Share], spend aggressively, All Systems Go on streaming,” he noted.

“We think investors will soon be willing to pay a high multiple (in some cases on revenue or on subs) for a global streaming growth story,” he continues. “So, if one is excited about the sub growth story then the stock price should take care of itself, in our view.”

Disney Plus
Credit: Disney+

Related: Will K-Dramas Come to Disney+? Disney May Expand to Korea & Taiwan!

As MarketWatch explains, Cahall believes that Disney could have 250 million streaming subscribers by 2025 — not including Hulu subscribers — and that subscriber growth will replace earnings per share “as the key metric Disney investors care about as the company moves from a “growth at a reasonable price” stock selection to a full-on growth story.”

In other words, all focus will turn to the growth of Disney+ and Disney’s other streaming platforms as investors’ primary reason for investing which will lead to even more growth.

This is similar to an analyst’s push back in October to convince the Walt Disney Company to retain the dividends — the money that gets paid out to stockholders twice a year — and invest the money into streaming services, which means more money for Disney+ content like more Marvel and Star Wars series like the upcoming Ms. Marvel and She-Hulk, and the rumored Boba Fett spinoff series.

Read More: How Disney Could Double the Content on Disney+

Cahall also predicts that Disney will release a plan to make its streaming service profitable by 2026, as well as a plan for “case-by-case releases of tentpole films into theatrical versus streaming windows.”

mulan live action preorder
Credit: Disney

Related: Theaters, Streaming, or Both? What Will Disney Choose for 2021?

The Walt Disney Company has already announced that it will continue to suspend its semi-annual cash dividend, and that they are determined to bring more quality content to Disney+ subscribers.

Disney’s CEO Bob Chapek recently said that they “realize though that part of the lifeblood of Disney+is providing great content to the base-level subscribers.”

Chapek also recently stated, “The real bright spot has been our direct-to-consumer business, which is key to the future of our company, and on this anniversary of the launch of Disney+ we’re pleased to report that, as of the end of the fourth quarter, the service had more than 73 million paid subscribers – far surpassing our expectations in just its first year.”

Due to the pandemic, an overflow of feature-length films have overflowed into the 2021 slate with the possibility still lingering that Disney would choose a streaming release over a theatrical one.

Read More: Disney on Film Industry: ‘Black Widow’ Update, More Disney+ Content in Works

The Walt Disney Company will hold its Investor Day 2020 webcast tomorrow, December 10, beginning at 4:30 pm ET. Be sure to subscribe and stay tuned to Inside the Magic as we bring you the latest Disney news as it breaks during the event.

What are your hopes for Disney’s direct-to-consumer streaming? Let us know in the comments!

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