Walt Disney Co. (NYSE: DIS) released its new video streaming service on Tuesday, with over 10 million subscribers joining as of Wednesday evening.
With content from Star Wars, Marvel, Fox, and Disney Animation Studios, the company is in an excellent position to compete with Netflix, the current leader in digital streaming. Stock is up this week, and confidence could continue if the service grows over the coming months.
Early Problems Offset by Consumer Interest
Despite the massive subscription numbers, the launch of Disney+ wasn’t flawless. New subscribers were unable to connect to the service on Wednesday, due to an unprecedented level of interest.
The company released a statement saying that “The consumer demand for Disney+ has exceeded our high expectations. We are pleased by this incredible response and are working to quickly resolve the current user issue. We appreciate your patience.”
The service has since stabilized, with logins and new signups proceeding as expected.
The early issues may even help Disney, as it will give the company an idea of the technical demands of operating a streaming platform. The sheer number of subscribers will also reassure executives and investors, with expectations for up to 90 million new subscribers by 2025.
Star Wars Remains a Big Draw for Disney+
Disney is the owner of Lucasfilm and the Star Wars license, having purchased the company for $2.2 billion in cash and $1.855 billion in stock in 2012.
Star Wars has proven to be a huge income generator for the company, although that income has been derived from the box office so far. With the new streaming platform, the company has released a live-action Star Wars show titled The Mandalorian. This has generated significant interest in the platform, with the first episode receiving overwhelmingly positive reviews from critics and audiences.
Disney will be able to leverage the Star Wars brand, along with 7,000 television episodes and 500 films that are already available on the platform.
Future Disney film releases are likely to be platform exclusive, which should keep Disney+ competitive.
Stock Receives Strong BUY Ratings
The bumpy but overall positive launch of Disney+ helped stock to climb 7.32% at the end of Wednesday trading. The stock is now up 13.29% over five days, and 35.63% when tracking data over the year so far.
The majority of analysts recommend a BUY rating on the stock with an average target price of $154.55.
With a mild dividend to go along with the growth, Disney now looks like one of the best entertainment stocks on the market.
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