There are people across the world who, even today, have still not experienced the pure joy that is seeing Baby Yoda on the Disney+ hit “The Mandalorian.” Frankly, it’s too horrifying to even imagine.
Fortunately, Disney (DIS) is in the business of bringing joy, recognizable intellectual property and merchandising opportunities across the globe.
After launching in the fall of 2019 in North America, Canada, the Netherlands, Australia, New Zealand and Puerto Rico, Disney has rolled out the service slowly across the world. The U.K., Germany and Italy didn’t get the service until March of 2020. But this summer, Disney is getting a bit more aggressive with its expansion.
Where Is Disney+ Launching?
Where is Disney+ launching? The short answer is: “pretty much everywhere.”
The company continues its previously announced worldwide expansion of Disney+ this month, launching in Greece, Turkey, Poland, Romania, Hungary, Czech Republic and Croatia, among other countries in Central Eastern Europe. It also launched in island territories controlled by Denmark, France, Finland the Netherlands, Norway and the UK.
So yes, soon the entire world can nitpick perceived continuity errors in “Obi-Wan Kenobi.” Disney+ has previously launched in South Africa on May 18, and across West Asia and North Africa on June 8. So by the end of this month, Disney+ will be available in 60 countries across Europe, West Asia and Africa.
For the most part, audiences will have access to the same TV shows and films that North Americans have been enjoying since 2019, though every country has its own content restrictions and content licensing agreements. In India, Indonesia, Malaysia, and Thailand, Disney+ has partnered with the popular South Asian streaming giant Hotstar for Disney+ Hotstar.
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So How Much Money Might Disney+ Make In Advertising?
Though the company hasn’t openly said as much, Disney is clearly gunning for Netflix’s (NFLX) crown as the top streaming service.
It gained 7.9 million paid customers in the first three months of 2022, a 33% year over year gain that brought its total subscriber numbers up to nearly 138 million. (And that’s setting aside for the moment Disney’s other two services: Hulu and ESPN.)
Netflix, on the other hand, lost 200,000 global subscribers in the first quarter of the year, and in a recent earnings call, it indicated that it will lose another 2 million global net paid additions over the three months ending in June.
But a recent analysis, noted by The Hollywood Reporter, had some good news for Netflix…and even better news for Disney+.
Disney+ will soon be launching an advertising-supported tier (though don’t get too excited about that, alcohol companies) that will both allow Disney to introduce a less expensive price point and generate revenue. After years of stern resistance to the idea of advertising, the streaming industry as a whole is beginning to relent.
MoffettNathanson analyst Michael Nathanson has shared his estimates for how this might go over, stating that Disney+ could generate $1.8 billion in U.S. ad revenue by 2025, with Netflix reaching $1.2 billion.
This analysis comes from a report titled “Mad Men to the Rescue?,” though Nathanson does concede that “very little is known about the pricing and available commercial impressions of these new ad tiers.”
The reason Disney+ will ultimately outpace Netflix in Nathanson’s view is “Netflix has the potential for much larger global ad growth, yet the domestic advertising opportunity for Disney+ appears greater due to a much lower starting revenue per user (RPU) versus Netflix, a more developed advertising infrastructure, pent up demand, affinity for Disney content and greater monetizable content availability as Disney owns the majority of their content.”
In other analysis news, Benchmark analyst Matthew Harrigan has downgraded the company from “hold” to “sell” with a new price target of $157. Ultimately, the viewership bump from the new season of “Stranger Things” wasn’t enough, in his estimation, to prevent the company’s ongoing slide.
“We view Netflix as now effectively a media name as other streamers are perfecting their interfaces and also have big data expertise, alongside significantly deeper IP libraries at Disney and Warner Bros. Discovery. Management needs to contain overall costs and execute better on its high teen billion cash programming spend, even as it covets a ‘Bridgerton’ a month to meet competition. It may be difficult to curtail spending in the mature U.S. market as competition gains traction, while aggressively investing in Asian growth markets, especially India.”
