Friday, Apr 12th 2019

Disney Announces Disney+ at $6.99 per Month


Disney will launch its streaming video platform & Netflix competitor, Disney+, in November at $6.99/month. We're excited about its prospects.

Disney is up +10% on Friday morning after it announced it will launch its streaming video platform & Netflix competitor, Disney+, in November at $6.99/month.

We tuned into the Investor Day to give you some quick insights.


  • Disney+ is a Netflix competitor, and it will launch in November at $6.99 per month, which is sharply lower than Netflix's $8-14 average despite a very strong content library including Star Wars and Marvel Studios
  • We were positively surprised by Disney+'s low price as well as its strong subscriber targets (60-90M by end of 2024)
  • We think Disney will give Netflix a run for its money given the lower price, broader content which lowers customer acquisition costs, bundle potential with ESPN+, Hulu to lower churn, and company's balance sheet and cash flows
  • That said, we're still positive on Netflix and think DIS/NFLX can coexist profitably

Bottom line: We are very excited about Disney+ and its prospects for the stock. The shift to a more recurring-revenue business model bodes well for Disney long term.

What will Disney+ look like?##

The interface looks a lot like the interface for Apple TV or Netflix (think of a grid of brands and content).

Disney Plus Homepage

The Disney+ homepage is obviously for navigation, but it's about showing consumers everything it owns, and reminding them that Disney is the only place to get it all.

Disney Plus 4K

This is a core part of our investment thesis that Disney will leverage its video library to drive sales of its toys, theme park tickets, and more.

When content will Disney+ include?##

All the hits. Here's a sample:

  • Adult: Star Wars, Marvel, Bohemian Rhapsody
  • Kids: Toy Story, Frozen, Finding Nemo
  • Classics: The Sound of Music, Titanic, Lion King, The Simpsons

When will Disney+ launch?##

November 12, 2019. Don't get too anxious though; we think the stock could reflect the growth and value creation that Disney+ will bring much earlier than Q4, as we explain below.

How much will Disney+ cost?##

$6.99 per month. That's about half of what Netflix charges for its standard HD plan.

We're very optimistic about the value provided to consumers at the $6.99 price point. Recent survey data from Morgan Stanley indicated healthy levels of interest for Disney+ at an $8/month price point.

What will I get in my Disney+ subscription?##

You can subscribe to Disney+ itself, or buy a bundle of all the Disney streaming services - Disney+, ESPN, and Hulu - at a discounted price. It's kind of like cable TV, but smaller and on multiple platforms and all under Disney's corporate umbrella.

But even better than cable, Disney+ will be ad-free -- no commercials. And all of its content will be available to download and view offline That's a feature Netflix only added in the last couple of years (and it still doesn't apply to everything on its service).

Disney+ will be a content powerhouse, with all the bells and whistles that Netflix provides, at almost half the price.

What's next for Disney's stock?##

We think the Disney+ service is well positioned to have an extremely strong launch that surpasses consensus subscriber expectations.

The Investor Day unveiling of Disney+ should shift the investor focus to the upcoming positive catalyst path.

As Disney becomes a more recurring, subscription-driven business - starting with Disney+ later this year - its valuation should grow from a consumer-esque one today (~16x P/E) to a higher, more Netflix-like valuation in years to come.

As of this writing, DIS was a portfolio holding of Titan. This security may cease to be a portfolio holding at some point in the future.
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