Walt Disney Co.’s plan to supercharge its streaming services, including a robust slate of shows from its “Star Wars” and Marvel franchises, sparked a buying spree in its stock Friday.
The company’s shares rose 14% to an all-time high of $175.72 after executives announced an aggressive plan for its streaming services, led by Disney+, to take on Netflix.
“We’ve clearly positioned ourselves as the leader in the direct to consumer space, and the truth is, we’re just getting started,” Executive Chairman Bob Iger said during a presentation for investors, analysts and press that stretched more than four hours late Thursday.
Disney Chief Executive Bob Chapek and a full bench of executives joined in the event, in which they set out a goal for Disney+, Hulu and ESPN+ to sign up 350 million combined subscribers in the next few years.
The company said it plans to bring more than 100 new titles per year to Disney+, representing a massive ramp up from its initial schedule.
Disney said it has 10 Marvel series, 10 “Star Wars” shows and 15 live action, animated and Pixar shows in the works for Disney+. It teased upcoming series about “Star Wars” fan-favorite Lando Calrissian, a live-action “Pinocchio” feature, a “Moana” show and a “Guardians of the Galaxy” holiday special.
In another display of confidence, Disney said its would raise its price for Disney+ in the U.S. by $1 to $7.99 a month, starting in March.
The company said it will also make some of its big films available for streaming next year, previewing a future when more of Disney’s movies premier in the home. Disney also touted upcoming original series for Hulu, ESPN+ and its new international Star brand.
Among the splashy announcements: a new Stephen A. Smith sports show for ESPN+, a series based on the “Alien” movie, a Rolling Stones series from FX, and the Kardashians bringing their reality TV shenanigans to Hulu.
The lineup comes as Disney+ and its sibling streamers need fresh content to continue to drive subscriptions, particularly after the pandemic slowed productions.
The Disney presentation amounted to a powerful statement showing how serious the Burbank entertainment giant is about growing its direct-to-consumer prowess. Disney and other companies including AT&T’s WarnerMedia, Comcast’s NBCUniversal and ViacomCBS are trying to boost their streaming ambitions as the COVID-19 crisis accelerates the public’s move from in-person entertainment options (like movie theaters) to phone apps and internet-connected TVs.
Iger said the success of Disney+ so far encouraged the company to create a production lineup “much more robust than initially anticipated.”
But despite the daunting schedule, Iger said the company is focused on quality, not quantity. “Quality holds its value, and that has been our mantra since we began telling stories,” Iger said.
The latest flex by Disney comes a little more than a year after then-CEO Iger launched Disney+ in a bold plan to adapt the company’s legacy entertainment brands for the streaming age. Tens of millions of subscribers, one pandemic and countless Baby Yoda memes later, Disney looks well on its way to a successful transition to a company that brings its movies and TV shows directly to fans online.
Disney on Thursday said Disney+ has 86.8 million subscribers as of Dec. 2, up from the 73.7 million it had as of Oct. 3.
Disney previously targeted 60 million to 90 million Disney+ subscribers, as well as profitability for the service by the end of fiscal 2024.
Thanks to hits such as “The Mandalorian” and the filmed version of “Hamilton,” a deep library of animated classics and families being stuck at home, Disney+ is well ahead of schedule. The company’s broader streaming business has 137 million subscriptions, including 38.8 million at Hulu and 11.5 million at ESPN+.
The company told analysts it now projects Disney+ subscribers to reach 230 million to 260 million through fiscal 2024. The company’s total subscriber base for all its services is expected to reach 300 million to 350 million in that time.
With all that additional growth and content comes bigger costs. Disney Chief Financial Officer Christine McCarthy said annual content expenses for Disney+ will hit $8 billion to $9 billion in fiscal 2024.
Netflix, currently the leading streaming service, counts 195 million global paying members.