Disney shares jumped as much as 9% in pre-market trading on Friday. The media giant plans to hike the domestic price of Disney Plus in March, and expects to triple its streaming service subscribers to between 230 million and 260 million by 2024. Disney also expects to double its annual content investment to about $15 billion over the next four years as it rolls out dozens of movies and TV shows from its studio and its Marvel, Star Wars, and Pixar subsidiaries. Most of Disney’s business has been hit hard by the pandemic, but millions of people have signed up to Disney Plus to keep themselves entertained during lockdowns. Visit Business Insider’s homepage for more stories.
Disney stock surged as much as 9% in pre-market trading on Friday after the entertainment titan laid out a bullish growth plan for its video-streaming business during its virtual investor day on Thursday.
The company intends to raise the monthly cost of Disney Plus in the US by a dollar to $7.99 in March, marking the platform’s first price increase since launching in November 2019. It expects to reach a total of 230 million to 260 million global subscribers by 2024, roughly triple its 87 million subscribers as of December 2.
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Disney is raising prices and projecting strong growth because it intends to double its yearly spending on content to about $15 billion over the next four years. It expects to add more than 100 new titles to Disney Plus annually, drawing from its Marvel, Lucasfilm, and Pixar subsidiaries and expanding on its own studio’s properties such as “Zootopia” and “Moana.”
As a result, Disney expects its streaming losses to peak next year, and hopes to break even in 2024.
Disney Plus is a bright spot in a brutal year
A key element of Disney’s strategy is taking a smash hit in one of its divisions, such as “The Mandalorian” show on Disney Plus, and cashing in on it across its business. It already sells “Baby Yoda” toys and clothing in its Disney Stores, and will undoubtedly seek to deploy the beloved character in movies, TV shows, video games, and attractions in its theme parks and on its cruises.
Disney’s approach backfired this year, as its sprawling operations left it massively exposed to the pandemic. The company was forced to close theme parks and resorts, halt cruises, shutter Disney Stores, delay movie releases due to production shutdowns and cinema closures, and even host the rest of the NBA season at Disney World to help its ESPN subsidiary weather the suspension of many live sports.
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The disruptions meant Disney posted a net loss of $2.8 billion for the year to October 3 – a sharp swing from $10.4 billion in net income in the previous financial year.
Given it will be months before Disney’s business can rebound, it’s not surprising that the company is doubling down on Disney Plus, which has seen a spike in signups this year as people spend more time at home.
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