- Disney is expected to launch its Netflix contender – Disney Plus – in the fall, and with it the media conglomerate could be poised to “win the OTT contest,” according to Laura Martin, an analyst at Needham & Company.
- After the launch of Disney Plus, the company will have three distinct streaming offerings including Hulu and Espn Plus, which it could then use for cross promotion and re-bundling, Martin said in a note to clients on Tuesday.
- Needham raised its 2019 revenue estimate for Disney by 6% to $71.67 billion, which would be a 21% year-over-year increase for the company.
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Laura Martin, an analyst at Needham, said Disney’s valuation has gapped up as more investors put their faith in the company to “win the OTT contest.”
Once Disney Plus rolls out in the fall, featuring major titles from the Star Wars and Marvel franchises, Disney will have three direct-to-consumer streaming platforms counting Hulu and ESPN Plus. With the addition of new content from Disney’s acquisition of 21st Century Fox, Martin sees the company becoming a legitimate streaming competitor.
“We believe that, together, DIS plus FOX can create a strong enough direct-to-consumer streaming offering to compete effectively with Netflix.” Martin said in a note to clients on Tuesday.
The firm increased its 2019 revenue projections for Disney by 6% to $71.67 billion. That would mark a 21% rise from the same period last year. Disney generated $827 million in sales from its direct-to-consumer offerings in the third quarter of 2018. Martin projects those sales will jump to $3.06 billion in the third quarter of 2019.
Boosted by Disney’s new assets from Fox, Needham expects Disney to hit $21.35 billion in sales in the third quarter of 2019, a 40% increase from last year.
Disney Plus will also have a pricing advantage over Netflix. The service is expected to cost $7 per month, compared to the cheapest Netflix plan which costs $8.99 a month.
Disney’s stock has increased as much as 32% since the beginning of 2019.
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