Beginning its international rollout this week, with debuts in the UK, as well as Austria, Germany, Ireland, Italy, Spain and Switzerland, Disney Plus is poised for a warm global reception, said MoffettNathanson analyst Michael Nathanson.
“We think three key areas are underestimated when thinking about Disney’s [direct to consumer] rollout,” Nathanson wrote in a note to investors published this week. “First, Disney’s brands are already known and proven not just in the U.S., but around the world. Second, Disney’s other businesses built on the back of its IP display the company’s ability to monetize its many brands and franchises. And lastly, Disney should be able to ride the existing infrastructure Netflix has already built out worldwide.”
Nathanson noted that Disney had a 30%-40% share of the local box office in 2019, across regions, even in places where English isn’t often spoken.
“Unlike Netflix, we do not believe Disney will need to start from scratch to build up local language content for each market,” he wrote.
Nathanson sees Disney Plus following the Netflix playbook for most regions, save for India.
Disney Plus postponed its launch in India due to the disruption associated with the ongoing COVID-19 pandemic. However, once the streaming service does unfurl in the subcontinental region, Nathanson sees it having an easier path than Netflix, which only has 2 million subscribers in India.
“Disney Plus potentially has a larger opportunity in that region,” he said, given Disney now owns Hotstar, a streaming asset acquired during the Fox acquisition that has 3 million monthly active users.
Disney Plus will launch in Indian and France in April, and in Belgium, the Nordics and Portugal in the third quarter. The service is set to expand to Eastern Europe, Latin American and the Asia-Pacific region in 2021.
As it unfurls around the globe, Nathanson predicted Disney Plus will continue to expand in the U.S., where it attracted 28.6 million users from its November 12 debut through December 31.
As its one-year deal to provide free Disney Plus service to Verizon unlimited wireless and Fios wireline customers expires later this year, Nathanson said, “The next wave of original content is about to arrive, with Marvel’s The Falcon and the Winter Soldier (August 2020) and WandaVision (December 2020), as well as the second seasons of The Mandalorian (October 2020) coming later this year.”
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