Disney Shares Gain as Redburn Turns Bullish on Streaming Outlook
Tuesday, Jan 7, 2025 12:40 pm ET
Disney's stock price has been on a rollercoaster ride in recent months, but one thing is clear: the entertainment giant's streaming services are a major driver of its success. In a recent report, investment bank Redburn turned bullish on Disney's streaming outlook, citing several factors that bode well for the company's future in the digital landscape.

Firstly, Disney's streaming platforms have seen remarkable subscriber growth. As of 2022, Disney+ alone has amassed over 150 million subscribers worldwide, a testament to the company's ability to attract and retain a vast user base. This growth is particularly impressive considering the intense competition in the streaming market, with rivals such as Netflix and HBO Max vying for viewers' attention.
Secondly, Disney's content portfolio has proven to be a major draw for subscribers. The company's iconic brands, such as Disney, Pixar, Marvel, and Lucasfilm, have generated billions of dollars at the global box office and have helped draw millions of viewers to the platform. By leveraging these powerful franchises, Disney has been able to create a diverse and high-quality content library that appeals to a broad audience.
Disney's strategic focus on high-quality content has also resulted in a significant increase in operating income for its streaming division. In 2024, the company reported an operating income of $321 million for the September period, a remarkable turnaround from the $387 million loss incurred during the same quarter last year. This profitability is a clear indication of Disney's success in the streaming market and its ability to generate revenue from its digital platforms.
Disney's integration of Hulu into its streaming offerings has also expanded its content library and appeal to a broader audience. This integration has resulted in more usage of Disney+ and viewership of Hulu programming, while also giving Disney the chance to move more customers into its Disney Bundle. Additionally, the introduction of ESPN+ on Hulu and the chance for non-bundle users to sample a significant number of Hulu and ESPN programs have further driven viewership and engagement.
In the battle for audience attention, Disney has snagged a bigger share of viewing than any other conglomerate, including YouTube, every month since September 2024. In November alone, Disney properties accounted for 11.1% of all TV viewing in the U.S. as measured by Nielsen, beating YouTube (10.8%) and significantly in front of Netflix (7.7%). Huge audiences for sports programming on linear networks ESPN and ABC, as well as news coverage from ABC, help put Disney ahead of its rivals. But 43 percent of Disney's viewership came from streaming, Nielsen says, and that number will continue to increase.
Disney's approach to content creation and licensing has also played a crucial role in its streaming services' popularity and subscriber retention. By leveraging its iconic brands and offering a diverse and high-quality content library, Disney has been able to attract and retain subscribers. Additionally, the integration of Hulu into Disney+ has allowed the company to offer a wider range of content, including adult-themed programming, which has helped to further enhance the appeal of its streaming platforms.
In conclusion, Disney's streaming services have seen remarkable success in recent years, driven by factors such as subscriber growth, a diverse content library, and strategic integration of Hulu. As Disney continues to invest in its digital platforms and adapt to the evolving media landscape, it is well-positioned to maintain its competitive edge in the streaming market. With Redburn turning bullish on Disney's streaming outlook, investors can expect the entertainment giant to continue its upward trajectory in the digital realm.