Walt Disney Co. (DIS) - Get Report shares bounced higher Thursday after the company said its Disney+ streaming service has attracted more than 50 million paid subscribers since launching less than five months ago.
The total includes around 8 million in new additions from India, where it launched earlier this month, and 42 million from developed markets in North America and Western Europe. On a global basis, it also looks to be well ahead of its main rival, Netflix (NFLX) - Get Report, which tallied non-US subscriber additions at 8.76 million over the three months ending in December.
It also looks well on track to meet its longer-term subscriber target of between 60 million and 90 million paid Disney+ subscribers by 2024.
“We’re truly humbled that Disney+ is resonating with millions around the globe, and believe this bodes well for our continued expansion throughout Western Europe and into Japan and all of Latin America later this year,” said Disney's Kevin Mayer. “Great storytelling inspires and uplifts, and we are in the fortunate position of being able to deliver a vast array of great entertainment rooted in joy and optimism on Disney+.”
Disney shares were marked 5.2% higher in early trading Thursday to change hands at $106.50 each, a move that would trim the stock's two-month decline to around 24.2%.
The impressive Disney+ numbers, however, should also be put into the context of the recent "stay-at-home" orders issued by major economies around the world amid the coronavirus pandemic, Credit Suisse analyst Meghan Durkin cautions, noting that corresponding shutdowns in Hollywood production -- a key component for Disney+'s subscriber growth -- could affect additions later in the year.
"Originals are important for not just marketing to potential new subscribers but managing churn, given Disney+ has a limited amount of content to bring adults in to begin with," Durkin said.
"Many customers are choosing 1+ year subscriptions for their more attractive price point, keeping initial churn low," she added, not it is "hard to extrapolate Disney+’s initial high take rate given Disney’s brand strength, quality of library (much of which has been well rested), and current stay-at-home dynamics."