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Disney+ Is Ready To Shake Up The Streaming Space

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Disney (DIS - Free Report) is finally releasing its long-anticipated streaming service tomorrow with cord-cutters and Disney junkies on the edge of their seats. This is expected to be the most significant video streaming platform release of the year and is undoubtedly going to shake up the space. Disney+ is adding a considerable revenue driver to Disney’s portfolio, and since its announcement, DIS has been propelled back into growth valuation levels.

Disney is now fully focused on utilizing all of its resources with Disney+ being the conduit. The company has over 80 years of original content from its first film Snow White and the Seven Dwarfs, in 1937 to the roughly $8 billion in box-office revenues so far this year.

Disney is expecting to have 2 million subscribers by the end of 2019 and 10 million by the end of 2020. I think that these numbers could even be on the conservative side.

Disney is partnering with Verizon and offering anyone with an unlimited plan a free year of Disney+, giving instant access to 50 million people.

Acquisitions

The firm has been amassing content with strategic assets such as its most recent deal for 21st Century Fox, which was Disney’s largest purchase to date with a $71.3 billion price tag.

Disney has been an acquisition machine for over 2 decades, with the takeover frenzy all leading up to its eventual launch of Disney+. Its ability to have full ownership of this much quality content is going to give them a huge leg up on competing platforms. Below you can see a timeline of Disney’s acquisitions.

Dethroning Netflix

The once streaming king, Netflix (NFLX - Free Report) , is now under the gun with upcoming streaming services not only taking market share but taking most-watched shows. Netflix has a vast catalog of quality original content, but losing shows like The Office and Friends to competing firms is not going to help consumer growth. Comcast (CMCSA - Free Report) and AT&T (T - Free Report) will be launching their own streaming services in the spring of next year, Peacock and HBO Max, respectively.

All these media conglomerates with 10,000s of hours of quality original content are pulling their shows from Netflix to support their platforms. Now specific smart TVs will no longer support Netflix at the end of 2019.

The streaming war is coming to a boil, and Netflix looks like it’s going to get burned. The streaming king is under attack from all angles, and I don’t think its growth outlook will be able to support its rich valuation multiples for much longer.

Well Positioned Disney+

Disney releases box-office hits around the world, with its brands being world renown. This service at $6.99 a month, which is almost half of Netflix's comparable package. The streaming platform is going to catch on fast with Star Wars, Marvel, and Pixar films, all being prime reasons for purchasing Disney+. I, for one, am very excited about binge-watching all the Star Wars films from first to last next weekend.

Disney+ is going to have exclusive rights to all of its productions as they are pulled from other streaming services. This service is going to be in the basket of essential streaming platforms in the household portfolio of services.

Almost all of Netflix's future growth is coming from international users, and Disney+ poses a significant threat. Disney films are typically international hits making it a globally distinguished brand. Disney Plus's sizable discount to Netflix makes it a much more attractive option when global consumers are deciding between the two services.

Take Away

I am confident that Disney+ is going to be a hit and at the same time, deliver a hit to Netflix. I am very enthusiastic about this service's release. Purportedly millions will be streaming this service as soon as I am off work tomorrow.

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