UPDATED with closing stock price. Disney stock reached a new high Tuesday after research firm Apptopia issued a report estimating streaming service Disney+ has reached 15.5 million downloads and generated $5 million through in-app purchases.
On November 13, the day after the launch of Disney+ in the U.S., Canada and the Netherlands, Disney announced it had drawn 10 million “sign-ups” — a different number than actual paid subscribers. (Apptopia’s estimate that day was 3.2 app downloads, which it said was consistent with the usual mobile vs. living room dynamics.) Even so, the number exceeded all estimates and powered the stock to a then-record $150 a share. It closed Tuesday’s trading day at $151.57, up more than 1% for the day on above-average volume, pulling back in the final hour of the session along with the broader market.
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After it released the 10 million figure, Disney emphasized that it would only be disclosing subsequent Disney+ statistics during quarterly earnings calls. The company’s next call is likely to be held next February, though a date has not yet been confirmed.
Separately on Tuesday, the media giant said it had restored the “continue watching” feature that it had disabled upon experiencing widespread glitches in the early hours after launch.
A distribution deal with Verizon (giving the wireless company’s subscribers a free year of Disney+), pre-sales that launched at D23 and bundling with Hulu and ESPN+ all contributed to the 10 million downloads. Google on Monday said it was offering three free months of Disney+ to all customers buying new Chromebooks. Despite all those tailwinds, Apptopia noted that the user base is not treating Disney+ as casual viewing. In its report Monday, the firm counted 25.6 million viewing sessions per day over the prior week. “This is a sign people are highly engaged with the mobile app,” the report said. A free week of Disney+ is being offered, with subscriptions then costing $7 a month.
Despite the fast start for Disney, which is well on its way to exceeding its initial target of 60 million to 90 million subscribers by 2024, rivals do not appear to have been affected. “It appears in the early going that Netflix, Amazon Prime Video and HBO are unaffected by Disney+,” the Apptopia report said. “Looking at U.S. data for these apps (Disney+ is not globally launched yet), we see download and user session trends uninterrupted from their trend lines.”
Netflix stock, which was down a fraction Tuesday, has actually risen 4% since Disney+ launched to reach its highest level since July. Along with Disney, Apple, WarnerMedia and NBCUniversal are in various stages of bringing out major challenges to established streaming players led by Netflix.
Disney+ went live in Australia and New Zealand on November 19 and will launch in the UK and Western Europe at the end of March 2020.
As the Apptopia numbers surfaced, one seasoned voice on Wall Street issued a far less bullish outlook on Disney overall. Todd Juenger of Bernstein Research, who maintains a “market perform” (neutral) rating on Disney shares and a 12-month price target of $138, issued an update of his financial models for the company. He based his new outlook on an SEC filing from Friday, which included a few tweaks to recent results.
Average revenue per user generated by Hulu has been “shockingly low,” Juenger argued, and dropped during the third to the fourth fiscal quarters. “This matters because Hulu is an integral driver of value for [Disney’s Direct-to-Consumer and International unit], and its value is a function of not only paid subscribers but also ARPU (and costs),” Juenger wrote. “It seems the effective subscription price for Hulu SVOD is very low (and even with that, Hulu barely grew in the fiscal fourth quarter, adding only about 500,000)” net new paid subscribers.
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