On April 11, 2019, Disney provided guidance of 60 to 90 million Disney+ subscribers for fiscal 2024. Some analysts argued that the total addressable market and opportunity may be larger than what management projected. Others were more cautionary, given the heated competition emerging in the video streaming space.
Disney's forecast anticipates Netflix-like growth for Disney+ over its first five years. (Netflix had 83 million subscribers within five years of separating its streaming subscription service from its DVD offering.)
What is the likelihood that Disney+ will reach 90 million subscribers for fiscal 2024?
In order to address this question, we used critical event extraction (CEE), which automatically identifies information from text documents that will impact a predicted outcome.
We established criteria for what would constitute critical events impacting the growth of Disney+. We then extracted information from 394 video streaming articles relating to these criteria published during September/October 2019. Here a sample of the results estimating how probability is changing over time.
Events impacting probability (p) of Disney+ reaching 90 million subscribers by 2024:
1) April 11, 2019. (Initial p =.5) -- Disney announces strategy for Disney+, including aggressive pricing of $6.99/month. Anticipated launch slate on November 12 will be lighter on originals (only 10) than other streaming services. The Mandalorian is the only high-budget tentpole. Over time, Disney expects to introduce 50 original offerings a year.
2) September 10, 2019. (p = .47) -- Apple will give one-year free subscription to Apple TV+ for customers who purchase new iPhones, other Apple devices.
3) October 16, 2019 (p=.48) -- Disney executives stress that Disney+ is not a niche play. "We are designing the product to appeal to a four-quadrant audience -- young, old, male, female..."
4) October 22, 2019. (p = .58) -- Verizon will provide free one-year Disney+ subscription to customers on its unlimited data plans as well as new Fios residential internet and 5G home internet customers.
5) October 25, 2019. (p=.62) -- Analysts at UBS poll 1,000 consumers in mid-October and find 86 percent had heard of Disney Plus. About 44 percent say they were likely to subscribe. UBS analyst John Hodulik argues the links to Verizon "de-risks" the subscriber dynamic for Disney+ over the next 12 months. MoffettNathanson analyst writes that with the Verizon ties and other promotional offers, Disney+ will have about 8 million subscribers worldwide by year-end and 18 million by the close of its parent’s fiscal 2020. (This compares with original projections of 2 million and 10 million for the respective periods.)
6) October 28, 2019. (p=.64) -- New York Times runs story entitled "Disney Is New to Streaming, but Its Marketing Is Unmatched." The piece highlights how Disney is using all its consumer touch points (from pitches on Dancing with the Stars to ads plastered on Disney World's massive fleet of buses) in promoting Disney+.
7) November 1, 2019. Current probability estimate for Disney+ reaching 90 million subscribers for fiscal 2024 = .64.
That's where we are now at. We will continue to refine the critical event extraction process as well as the algorithms used in estimating this "closing event" probability.
