Disney May Finally Make Netflix Sweat

Even streaming pioneer Netflix hasn’t reached close to that level yet. And if you factor in Disney’s other streaming properties, Hulu and ESPN+, the company sees the full base of paid subscribers for its direct-to-consumer offerings hitting a range of 300 million to 350 million by September of 2024. Wall Street analysts currently expect Netflix’s global subscriber base to be just crossing the 300 million mark by that time, according to consensus projections tabulated by FactSet.

It is an ambitious goal, and hardly a sure thing, especially since both Disney and Netflix can chalk up a good deal of their recent success to the pandemic that has shuttered movie theaters, theme parks, restaurants and other entertainment options. Netflix has explicitly warned investors that much of its recent growth was likely pulled forward from future periods. And while Netflix is a streaming-only company, Disney made clear at a four-hour investor event Thursday that it is not throwing in the towel on theatrical movies. The company maintains plans to release big-budget titles next year and beyond from its properties including Star Wars, Marvel, Pixar and Disney.

But Disney now has a lot of ways to play both sides of the fence. The company previewed several shows and movies from its blockbuster franchises coming to Disney+. This includes a full Star Wars movie called “Andor,” from screenwriter Tony Gilroy, of the Bourne franchise. It also has several series coming from its Marvel universe, while its ownership of the old Twentieth Century Fox business and channels such as FX give the company plenty of material to appeal across audience types. The success of Disney+ gives the company options to stay flexible, contrasting with a recent move by AT&T’s WarnerMedia division to move the full slate of its Warner Bros. theatrical movies targeted for next year to its HBO Max service, which has seen much lower adoption.

Disney’s streaming push still won’t be cheap. The company is sticking with its prior goal of having its direct-to-consumer business profitable by the end of fiscal 2024, despite now projecting a much larger subscriber base by that time. Disney expects to reach a level of releasing 100 shows and movies for streaming each year, many of them Marvel and Star Wars shows that won’t be cheap. But investors have been effectively cutting Disney a blank check for streaming lately anyway, sending the stock up 24% just since the company announced a management reorganization in mid-October to focus more on streaming. It’s hard to blame Disney for cashing it.

Write to Dan Gallagher at [email protected]