Walt Disney Pictures is planning to unveil their own streaming service in the near future, and it has the potential to be a $25 billion asset for the company. Few studios working in modern Hollywood have as much power as the Mouse House, who posses a bevy of lucrative properties that continuously score box office gold. Disney distributes works from subsidiaries such as Marvel, Lucasfilm, and Pixar, in addition to releasing their own in-house content (see: their animation division). Last year, four of the studio’s movies crossed the $1 billion mark at the worldwide box office, and Disney saw another one of their projects (Beauty and the Beast) become a member of that club in 2017.
Disney’s dominance over the marketplace has put them in a unique position, as they’re the curators of several in-demand movies each year. Over the summer, they announced plans to sever ties with Netflix and launch their own streaming service for 2019, which would house all of their movies. The financial incentives behind this decision are quite apparent, and now it’s been revealed just how much revenue Disney could generate if it all goes according to plan.
Per a report in Business Insider, it is estimated the Disney streaming service could attract more than 30 million subscribers over the next decade, which would place its value at approximately $25 billion. Hitting the 30 million mark would generate roughly $5 billion in revenue and $1.5 billion in earnings before interest and taxes.
It isn’t out of the question for Disney to reach this number of subscribers, especially considering the content they have at their disposal. Cord cutting is en vogue and physical media sales are declining, so streaming is the way to go for many viewers. The allure of seeing the latest installments in franchises like the MCU and Star Wars probably will be enough for the Mouse House to turn this endeavor into a success. With both Marvel and Lucasfilm planning new projects for the next 10+ years, Disney’s cash cows aren’t going to slow down anytime soon. If subscribing to Disney’s streaming is the only way to watch them on mobile devices, die-hard fans will pay up.
However, an argument can be made Disney is starting to get too big for its own good. A majority of media consumers already subscribe to at least one streaming service (Netflix has more than 100 million worldwide), so the prospect of paying extra to see the Avengers or the galaxy far, far away may not have much appeal for some who are looking to save money. Some Mouse House investors are also concerned Disney leaving Netflix behind could have negative ramifications moving forward. It will be interesting to see how this all plays out, but it would be safe to bet against Disney. They’re a smart corporation that’s made several savvy moves over the last several years, so they wouldn’t have moved forward with this unless they were confident it would be a benefit.
Source: Business Insider
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