Could Upstart Disney Plus Eclipse Netflix in the Streaming Wars?

For the longest time, Netflix has been the subscription streaming service to beat. The Silicon Valley native pivoted to digital more than a decade ago, becoming a mainstay in more than 195 million households worldwide and plowing billions of dollars into content.

But in just a year, Disney Plus has proved to be a powerful siren of its own, boasting more than 86 million paying subscribers — most of them not even households with children, disproving skeptics who believed the service to be a niche streamer. Together with Hulu and ESPN Plus, the Walt Disney Co. already has more than 137 million global SVOD customers, and its Dec. 10 investor day laid out the blueprint for years of shiny “Star Wars,” Marvel, Pixar and Disney-branded eye candy to come.

Amid the deluge of flashy news, one takeaway not to be overlooked? In just four years, Disney is likely to have more streaming customers than Netflix.

Equity analysts largely project Netflix reaching 295 million to 310 million subscribers by 2024. By Disney’s projections, revealed on investor day, Disney should have somewhere between 300 million and 350 million paying subscribers by then. 

That figure is a sum of three parts: a forecast 230 million to 260 million paid subscribers to Disney Plus (Hotstar customers account for 30%-40% of that figure), 50 million to 60 million Hulu subscribers and 20 million to 30 million ESPN Plus customers.

That would still give Netflix a sizable edge over Disney Plus alone. Beyond that time frame, MoffettNathanson analyst Michael Nathanson expects Disney Plus and Hulu to start closing the gap with Netflix in the U.S., with a projected 65 million domestic Disney Plus customers and 64 million non-live-TV Hulu subscribers in calendar 2025, a stone’s throw from his projections for 71 million domestic Netflix subscribers during the same period. Meanwhile, HBO Max currently has 12.6 million activations and more than 28 million customers with access to the AT&T-owned streamer since launching in May, and has previously projected 50 million to 55 million subscribers by the end of 2025.

Achieving steep growth figures comes at a cost. WarnerMedia’s decision to splash Warner Bros.’ whole film slate for next year onto HBO Max means potentially losing out on box office revenue if the pandemic subsides enough for movie theaters to reopen at a decent clip, but exponentially magnifies HBO Max’s allure for would-be subscribers as the COVID-19 pandemic rages on.

Disney plans to spend $14 billion to $16 billion on content across its three major streamers — Disney Plus, ESPN Plus and Hulu — in fiscal 2024 alone.

What the endless outpouring of shows and movies will do to subscribers’ content expectations is not difficult to predict, and it may make them more amenable to paying more. With Disney Plus’ pending price hike of $1 a month stateside and 2 euros a month in Europe (to $7.99 and 8.99 euros respectively), Barclays analyst Kannan Venkateshwar estimates that that should bring in $8 billion in incremental streaming revenue for 2024.  

And that will allow Disney to assert its budding dominance. In a note to clients, Nathanson wrote, “The sheer size and quality of the content tsunami headed to Disney Plus was mind-blowing and frightening to any sub-scale company thinking about competing in the scripted entertainment space.”

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