Disney+ Signed Up 10 Million Users, but Some Seem to Be Looking for an Exit
Walt Disney’s (ticker: DIS) Disney+ streaming-video service is off to a spectacular start, with 10 million people signing up in the first 24 hours after its Tuesday launch.
LightShed Partners analyst Rich Greenfield considers the rapid uptake to be a remarkable achievement, which “illustrated the power of the Disney brand,” as well as “pent-up demand for the product.”
But Greenfield—the subject of a Q&A in last week’s Barron’s—says the big start raises questions about churn.
“Can Disney Plus hold onto the huge number of early subscribers and continue to add new subscribers?” he asks in a blog post Friday. “Data from Google Trends comparing Disney Plus to Netflix [NFLX] should temper investor excitement over day one Disney+ subscribers and reinforces our belief that Netflix will be largely unaffected by the launch.”
Greenfield says the app is “beautiful” and now working well after some early glitches. But he also says that for adult viewers, “there is not much to do unless you love watching old movies.” He says even Apple’s (AAPL) Apple TV+ has more content for grown-ups than Disney+. After watching the first episode of the Star Wars series The Mandalorian, he says, there’s not much for adults to do except to wait for the next episode.
“We wonder whether new users without young kids will churn at a high rate until the content offering expands,” he writes.
As an experiment, Greenfield searched for the terms “Cancel Disney Plus and Cancel Netflix” in Google Trends. And what he found is a frenzy of searches on the Disney side.
“While Netflix has picked up in recent days, it is still below historic highs over the past two years, while Disney Plus is soaring at 4x Netflix levels, despite having a fraction of Netflix’s U.S. installed base,” Greenfield writes.
Disney stock closed down 1.7%, to $144.67, on Friday. The S&P 500 was up 0.8%.
As seen on www.barrons.com, written by Eric J. Savitz