In “Has the magic returned to Disney?” I observed that much of Walt Disney’s (NYSE:DIS) future value will be determined by its success in going DTC, or direct-to-consumer, via streaming services. As this remains the fulcrum on which the Disney investment case rests, I will begin with a review of Disney’s recently reported Q3 2023 DTC results. To set the stage, the following quote is from “Has the magic returned to Disney?” (emphasis added):
In the mid-decade timeframe, Disney estimates that it will reach 230 to 260 million Disney+ subscribers. Adding Hulu and ESPN+, total DTC subscribers are likely to approach 300 to 350 million globally by mid-decade. As these estimates appear achievable, pricing will be a key indicator going forward.
Direct-to-Consumer
To gauge Disney’s success in the DTC market, Netflix’s performance serves as an excellent measuring stick as it is the most successful streaming company. In the following table, I compare the number of Disney subscribers to that of Netflix (compiled from each company’s most recent quarterly filings with the SEC) and show the number of members Disney could add if it mirrored Netflix’s subscriber number success.
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