Is Disney+ becoming a cash machine?
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Disney, an entertainment giant that has been seen as a stagnant dividend growth stock for quite some time, started attracting the attention of growth investors when they've unveiled Disney+ as a way to reduce its dependence on Netflix for streaming content. This move prompted Netflix to spend a lot more on creating original content in order to combat the disappearance of Disney's content and other content that plans to disappear as more and more entertainment companies create their own streaming services.
Plus, Disney has other subscription services like ESPN+ and Hulu, which adds more revenue per year. While those two services aren't as significant as Disney+, it still helps Disney with generating revenue while the lockdowns are happening.
Disney, an entertainment giant that has been seen as a stagnant dividend growth stock for quite some time, started attracting the attention of growth investors when they've unveiled Disney+ as a way to reduce its dependence on Netflix for streaming content. This move prompted Netflix to spend a lot more on creating original content in order to combat the disappearance of Disney's content and other content that plans to disappear as more and more entertainment companies create their own streaming services.
With Disney+ providing a growth catalyst for Disney, many investors wonder if Disney+ is going to provide massive financial gains for the company since Netflix hasn't achieved true profitability for being a streaming service. Also, many were worried that with many streaming services, Disney+ wouldn't be attractive to consumers.
Interestingly, a few months after Disney+ was released, the streaming service had over 50 million subscribers. This is a massive success for Disney and many investors did not see that coming. Disney+ hasn't been released in other nations like Japan and other nations but that gives the service more room for subscriber growth.
With the coronavirus pandemic prompting nations to initiate lockdowns and the shutdown of non-essential businesses, Disney+ has provided the company with a lot of revenue in the meantime, helping the company survive the closure of their parks and hotels.
Conclusion
With investors pessimistic on Disney because of doubts of whether they'll survive the lockdowns, at the end of the day, Disney+, Disney's newest revenue source, which has been a big success, will help Disney weather the financial impacts of the lockdowns.
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