On Tuesday morning, The Walt Disney Company (DIS) launched its Disney+ streaming service, and one day later the company announced it has already achieved 10M sign-ups. After the milestone announcement, Disney shares were on the rise, while Netflix shares dipped.
DISNEY+ REACHES 10M SUBS: Disney+, the streaming service from Disney, has "already reached a major milestone, achieving a remarkable 10 million sign-ups since launching," the company confirmed in a press release. Disney added that, "Moving forward, there are no plans to release Disney+ subscriber data outside of The Walt Disney Company's quarterly earnings calls."
Credit Suisse analyst Douglas Mitchelson had written in a research note to investors last Wednesday that, "The 10M subscriber level seems to be an inflection point for sentiment; 70% of investors would start new positions or add to existing ones there." Mitchelson raised his price target on Disney shares to $163 from $150 following the announcement that Disney+ reached that milestone.
'JAW DROPPING' START: Wedbush analyst Daniel Ives said Disney announcing 10M subscribers for Disney+ is a "jaw dropping" figure that he believes is considerably higher than many on Wall Street were anticipating. He also thinks Disney could hit its long term subscriber target of 60-90M by 2024, or even potentially two years earlier at this pace. The company's "unmatched content" and "massive" brand and distribution make Disney+ a "legitimate streaming competitor on Day One" to Netflix (NFLX), Ives added. Commenting on the recent launch of Apple's (AAPL) TV+, Ives said pricing, content, and especially the company's installed base remain its "major strategic weapons."
DISNEY+ LAUNCH MARRED BY TECHNICAL ERRORS: Disney+'s launch on Tuesday was hit by some technical errors, with users began reporting issues with the service on Twitter. Disney+ Help tweeted, "The consumer demand for Disney+ has exceeded our high expectations. We are working to quickly resolve the current user issue. We appreciate your patience." Disney also delayed the launch of Disney+ in Puerto Rico. The company said today that the service will now roll out in Puerto Rico on Nov. 19, which is a week later than it initially announced.
DISNEY STOCK SOARS, NETFLIX DROPS: In afternoon trading, Disney shares are higher by 6.3% to $147.33, while streaming competitor Netflix shares are down 2.6% to $284.45.