Disney’s direct-to-consumer revenue is outpacing all other median and network rivals
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Disney’s direct-to-consumer streaming business has already gotten off to a successful start, but analysts expect the media and entertainment giant to generate $11 billion in streaming revenue this year, putting it far above its media and network counterparts.
Analysts at Macquarie Research said they expect Disney’s streaming revenue to make up roughly 19% of the company’s overall revenue this year, and 21% in 2021 when revenue is expected to hit $15.5 billion (including Disney+, ESPN+ and Hulu), which would represent nearly five times the amount of growth as linear TV.
“Disney’s hugely successful streaming services launch has left all other traditional media companies far behind in the transition to direct-to-consumer offerings,” analysts Tim Nollen and Sean Kumar wrote in a recent note to clients. “2020 is of course an unusual year – though for some, the collapse in TV advertising and rapid shift of consumers from traditional to streaming TV makes it even more relevant. So we think it’s important to look at a hopefully more ‘normal’ year in 2021, when at least advertising shouldn’t have suffered a COVID-related shock drop.”
During its third-quarter conference call, Disney reported that Disney+ (which launched last November) had 60.5 million subscribers, putting it well ahead of its own, as well as, analyst projections. Streaming revenue during the most recent quarter hit nearly $4 billion.
The streaming wars are now at full force as companies launch their own services. Not to mention the last six months of the pandemic have shown the importance of having a foot print in streaming while also elevating its growth, as advertising revenues decline, production halted and theaters shut down.
The percentage of overall revenue is important because it shows a smaller reliance on traditional media revenue.
Comcast and Fox are falling short in the streaming game at this point, according to Nollen and Kumar. Comcast’s Peacock streaming service only just launched last month and the analysts expect it to generate $1 billion in revenue next year. Fox, which sold off its entertainment assets to Disney last year, recently acquired ad-supported streaming service Tubi to give it a small footprint, so Nollen and Kumar are forecasting roughly $500 million in direct-to-consumer revenue — 4% of the total — next year.
Perhaps surprisingly, Lionsgate sits near the top of the list among media rivals when it comes to streaming revenue and its percentage of overall revenue. The company falls just behind Disney with its estimated $631 million in 2020 streaming revenue making up 18% of the company’s overall all revenue.
Nollen and Kumar said they estimate that Lionsgate’s Starz streaming service will be larger than its premium pay TV business next year.
ViacomCBS, which had a head start with its CBS All Access and Showtime services launching in 2015, is expected to generate the second highest in streaming revenue at $1.5 billion, which would put its overall contribution to company revenue at 8%.
Of course these all pale in comparison to Netflix, which analysts expect to generate $25 billion in revenue this year.
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