Disney’s Sizzle Reel Sends Stock to New Highs

In addition to announcing plans for 100 new titles to debut annually, Disney revised guidance that had previously predicted Disney+ could hit 90 million subscribers by 2024. The new projection was an earthquake: as many as 260 million. Netflix currently has 200 million subscribers, but it isn’t growing as quickly. Other streaming upstarts, like WarnerMedia’s HBO Max and NBCUniversal’s Peacock are far behind.

Wall Street sent Disney stock to an all-time high Friday, with shares rising about 14% in afternoon trading to around $176.

The Disney presentation capped one of the most acrimonious weeks in Hollywood’s focus on streaming. On one end, there was AT&T Inc.’s Warner Bros. Since the studio announced last week it would ship its entire 2021 slate to HBO Max, about one A-list director comes forward each day to call the decision a blow to the cinematic art form.

Disney, on the other hand, has turned its production prowess—and billions of dollars in production expenses—toward streaming shows and movies, while reserving the exclusive theatrical run for its biggest releases. The company, which has worked to craft movies and characters appealing to the widest possible audience, appears comfortable to land on an option that keeps Wall Street investors and theatrically focused directors happy, or at least quiet.

Disney’s record stock-market high Friday is more than double the share value seen in mid-March, when its stock plummeted to around $85 a share as investors took a pessimistic view of a year with closed theme parks and movie theaters. The company’s much-publicized pivot toward streaming in the past year, which investors seized on during the coronavirus pandemic that has kept millions of people at home, has allowed the company to turn its Wall Street fortunes around.

While it is now a two-horse race for streaming supremacy, Netflix investors shrugged off Disney’s lofty projections. The streaming giant’s stock was flat in Friday trading.

Netflix has been focusing much of its efforts on expanding overseas, where it has seen much higher growth in recent years. MoffettNathanson media analyst Michael Nathanson projects Netflix will top 300 million subscribers by 2025.

For Disney, the investor day solidified a narrative the company has put forward since the start of the pandemic: It shouldn’t be treated as a traditional media company with aging assets whose biggest profits typically come from cable networks and theme parks, but a streaming service with years of potential ahead.

Disney’s “stock should be considered as in the same camp as other fast-growing Internet companies [like Facebook Inc. or Amazon.com Inc. ] or consumer companies like Walmart / Nike, ” Mr. Nathanson said in a Friday report.

Data shared by Disney Chief Financial Officer Christine McCarthy put to rest the notion shared by some in Hollywood that Disney+ is primarily attractive to children or young subscribers—a potential liability in its quest to have something for everyone, like Netflix does. In fact, Ms. McCarthy said, the service has more subscribers who don’t have children than do.

Overseas, Disney is incorporating features into Disney+, such as its Star entertainment service, that offer R-rated and more mature programming than it provides in the U.S. Analysts have speculated the company could be planning a similar integration domestically, pulling its Hulu content into Disney+ as an adult-oriented option.

A Netflix spokesman declined to comment. Netflix Chairman and Co-Chief Executive Reed Hastings has previously praised Disney’s execution on Disney+.

Still, there is no doubt that Disney has put Netflix on notice not to let its guard down in terms of content spending. BMO Capital Markets has projected that Netflix will spend more than $17 billion on content this year, with that figure expected to grow to $26 billion by 2028. Disney plans to spend between $14 billion and $16 billion by 2024, with most of that going toward Disney+.

Disney’s ambitious slate and forecast might be a bigger concern for other streaming players such as HBO Max, which launched in May and has about 12.6 million subscribers. Despite its vast library of movies and TV shows as well as new original content, HBO Max hasn’t taken off the way Disney+ has.

While WarnerMedia’s plan to premiere Warner Bros.’ full 2021 slate of theatrical releases on HBO Max simultaneously might help the streaming platform, the creative community was taken aback both by the news and that they weren’t briefed on it in advance. Top directors including Christopher Nolan (“Tenet”) and Denis Villeneuve (“Dune”) blasted the strategy in the trade press. Since Mr. Villeneuve’s film is among those included in the plans, the studio could face months of acrimony ahead if directors and stars refuse to promote movies released under the initiative.

Richard Lovett, president of Creative Artists Agency sent a letter, viewed by The Wall Street Journal, to WarnerMedia CEO Jason Kilar accusing him of “trying to take advantage of our clients to benefit your company.”

Disney is taking a more measured approach, keeping its biggest releases, like the forthcoming “Black Widow,” on the theatrical release calendar. Disney plans to release 20 movies in theaters next year, according to a schedule provided by the company Friday morning.

Write to Erich Schwartzel at [email protected] and Joe Flint at [email protected]