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Disney's Stock Hits Its New All-Time High As Roku Even Benefits From Disney+ Momentum

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Disney's Stock Hits Its New All-Time High As Roku Even Benefits From Disney+ Momentum

Shares of Walt Disney Co (NYSE: DIS) were in breakout mode after reports surfaced about momentum in its Disney+ program. According to Apptopia, the momentum is nearing to 1 million subscribers per day. If true, expectations may still not be high enough for Disney+.

November was surely quite a month for Disney as the iconic powerhouse couldn't have asked for a better start of its streaming service debut! And there is never a dull moment nor a dull month when it comes to the House of Mouse.

Disney+ Signups Exceed Expectations

The biggest new streaming service of 2019, Disney+, debuted on Nov. 12 and despite some initial difficulties on the technical front, it topped 10 million sign-ups on its very first day, free trials included. As a result of Apptopia's reports suggesting stronger than even expected demand, its shares hit a new all-time-high last Tuesday.

December Dates

Disney is about to make quite a bit of fireworks before Christmas. December 3, Disney is scheduled to add another special jewel to its vault: One Day at Disney. This special documentary follows 75 Disney cast members around the globe, during their typical day. Enabling its employees to tell their stories and giving meaning to their tasks is both a perfect HR and PR strategy to both elevate employees and enchant the audience. And it can surely further increase the appeal of the media giant.

Next, on December 5th, Disneyland in California and Disney World in Florida are in for a high-tech and immersive game-changing addition. Although Disney World is somewhat better off, Disneyland has been struggling with year-over-year declines in attendance. Well, on Thursday, Star Wars addition will be welcoming visitors at Disney World so it will hopefully raise the bar as it will also join Disneyland next month. Otherwise, entry to Mickey's world will only get more expensive.

In other words, Star Wars: Rise of the Resistance cannot afford to fail visitors. And last but not least, and also Star Wars: The Rise of Skywalker premieres on December 20. Although no movie can please everyone, there are strong expectations to set box-office records for the franchise. And it needs to keep the audience's interest for the next Star Wars trilogy which is expected in 2022. And it could even affect Disney + since the company's unique eco-system has shown a hit often sets everything else in motion.

The Competitive Landscape Is Getting More And More Intense- But Roku Triumphs!

As a consequence of Disney's fame, Netflix Inc (NASDAQ: NFLX) is losing its loyal customers, but also due to raising prices for the second time since 2017. And there is also Apple Inc's (NASDAQ: AAPL) TV+ who just debuted as well and Amazon.com, Inc.'s (NASDAQ: AMZN) service bundle. Not to forget, AT&T Inc (NYSE: T) will launch its HBO Max in May next year and the telecom giant expects 50 million subscribers during the first five years, which are also bound to take a toll on Netflix. Netflix seems to be forced to drop its pricing or risk losing a lot of subscribers.

But, the question of content is the one thing ‘money can't buy' and the one category in which Disney is the ultimate winner. But there's the streaming pioneer Roku (NASDAQ: ROKU) which overcame fears that intense competition would dent its unique business model. Despite losing more than a third of its value when Apple announced its aggressive pricing strategy, it turned out that all these additions actually helped Roku, just like its management predicted.

And Disney's soaring demand also helped Roku grow. The strong demand for its app was an ‘unintended' benefit making Roku the unintended beneficiary as Disney+ service was available to stream across Roku's infrastructure of devices and ecosystems, so it was a win-win. Data shows that over the past 13 days that downloads of Roku apps jumped almost 30% in comparison to the previous 13-days period.

And this is only a small addition comparing to the impressive growth Roku exhibited this year as it grew 54% in the first nine months of 2019 comparing to the same period last year. Its platform revenue grew at an even more impressive rate of 81% and active subscriber base expanded 36% year over year in the third quarter, reaching 32.3 million.

Outlook

Disney+ momentum is showing impressive results, but Disney has a lot of fronts to compete on. The House of Mouse is on a quest to defeat Netflix as the emperor of streaming as the company made a goal to achieve 60 million and 90 million subscribers by 2024. And despite some initial technical glitches that Disney says were due to heavy demand, it's doing rather well considering it signed on 10 million subscribers within the first 24 hours of Disney+' existence, but there's no autopilot in this competitive landscape.

Meanwhile, Roku has shown it benefits from all this competition, and Disney+ was another plus for Roku, whose stock has gained more than 400% this year. And it seems that Roku's business model is by far the fiercest one on the market, not to say the ‘bullet-proof' unbeatable one as it's going strong against headwinds and even benefiting from its so-called competitors!

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© 2019 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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Image by Colin Behrens from Pixabay

Posted-In: disney HuluEarnings News Markets Tech Media General

 

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