Yahoo Finance Disney (DIS) Benefits From Hamilton's Launch on Disney+
Disney’s DIS video streaming service –– Disney+ –– reportedly witnessed a surge in downloads after the launch of Broadway musical Hamilton on the platform.
Per data analytics firm Apptopia, the Disney+ app was downloaded around 752K times globally and 458K times in the United States over the Jul 4 holiday weekend following Hamilton’s release on Jul 3. The global download numbers indicate growth of 46.6% over the average of the prior four weeks in June, while growth in the United States was 74%.
Moreover, the global numbers don’t include India and Japan as Disney+ is delivered though pre-existing apps in those countries (Hotstar and NTT DoCoMo, respectively).
The Hamilton movie, which is a live recording of the original musical, was initially supposed to debut in movie theatres in October 2021. However, the shutting down of theatres due to coronavirus-induced lockdowns forced Disney to release the movie on its streaming service.
The Walt Disney Company Price and Consensus
The Walt Disney Company price-consensus-chart | The Walt Disney Company Quote
Strong Content Portfolio to Aid Disney+ Growth
Hamilton’s release is in line with Disney’s strategy of strengthening the Disney+ portfolio by releasing movies that were scheduled for a theatrical release directly on its streaming service.
Notably, the adaptation of popular fiction Artemis Fowl that was supposed to hit theatres on May 29 started streaming on Disney+ from Jun 12. In India, the company announced the launch of Disney+ Hotstar Multiplex that will see the direct release of Bollywood movies on the OTT platform that were originally slated for a theatrical release.
Further, Pixar’s Onward was added to the Disney+ library within a few weeks of its release after the movie’s theatrical run was dampened by the closing down of theatres.
These endeavors are expected to help the streaming service acquire subscribers amid the pandemic as fans will able to watch their favorite movies without leaving their homes. Markedly, Disney+ had 54.5 million subscribers as of May 4, up from 33.5 million as of Mar 28.
Additionally, the service’s robust portfolio makes it well poised to counter competition from the likes of Netflix NFLX, AT&T’s T HBO MAX and Amazon’s AMZN prime video in the video streaming space. Per Grand View Research data, the video streaming space is expected to witness a CAGR of 20.4% between 2020 and 2027.
Persistent Risks
However, huge investments in developing and acquiring content for its streaming service are expected to hurt profitability of this Zacks Rank #5 (Strong Sell) company.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Moreover, Disney’s businesses have been affected by the coronavirus outbreak, which is expected to hurt its top line as well as profitability in the near term. Additionally, a leveraged balance sheet is a significant headwind.
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