Walt Disney Co (NYSE: DIS) had its annual investor day earlier this week and the company provided some useful insights into its strategy.
It was no surprise that a focus on Disney+ (along with its other content offerings) was a big part of it. Disney has had resounding success with its direct-to-consumer (DTC) offering.
Disney+ already has around 87 million subscribers, as of the beginning of December, while its popular Hulu service itself has around 37 million subscribers.
Expectations have been pumped up. Although the goal of reaching profitability remains the same (by FY 2024), the content expense is expected to balloon.
Throwing down the gauntlet to Netflix Inc (NASDAQ: NFLX), estimates at last year’s Investor Day saw Disney+ expecting to spend US$4 billion on content in FY 2024 (see below).
However, that estimate has now more than doubled to US$8-9 billion. Together with all its other direct-to-consumer offerings, Disney is expecting to spend a whopping US$14-16 billion on global DTC content in FY 2024. It’s a big bet on the power of content.
Can it take eyeballs (and dollars) away from Netflix and the host of other streaming competitors? The company is certainly intent on doing so but that key measure of subscriber growth is what investors should monitor as Disney’s content offerings continue to expand.
Source: Disney Investor Day presentation
Disclaimer: ProsperUs Head of Content Tim Phillips doesn’t own shares of any companies mentioned.
