A new report by mobile app market intelligence firm Sensor Tower seems to confirm what many in the media and entertainment worlds already anticipated – that Disney+ is an early smash success. Based on its estimates (and these are estimates rather than actual numbers, about which a top Disney exec would not comment), Sensor Tower concludes that Disney sandbagged when it told the markets a few months back that it expected 20-30 million paid subscribers by year 2024. Kid-obsessed parents who aim to please their little ones – and Star Wars aficionados alike – are believed by the firm to have already downloaded the app nearly 41 million times in just its first two months. These numbers include free trials, of course – an important distinction not found in the report but confirmed directly with the firm. 28 million of those 41 million reported downloads took place in the service’s first 30 days, which would mean roughly one-third were triggered in month two. If correct, that means that Disney+ boasts some early “legs.”
Sensor Tower also estimates that 4 million of the first month’s 28 million sign-ups represent actual paying customers. That’s a conversion rate of more than 14%, a number that scores on the higher end of conversion spectrums. Most media services would salivate with a number closer to 5% (i.e., one-third Disney+’s). These are Disney+’s early days, of course, and Sensor Tower is unable to estimate whether reported conversion rates held steady for month two. But assuming that they do, Disney+’s paid subscriber count approaches 6 million after only 60 days – which already would represent 20-30% of Disney’s stated five year goal. Disney must retain these subscribers of course in the face of alternatives.
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Importantly, Sensor Tower also reports that Disney+ generated real cheese – of the green variety – for Mickey and his friends. The firm estimates that the service generated nearly $100 million in revenue via the App Store and Google Play in its first 60 days, 84% of which was pasteurized in the U.S. [flowed from U.S. consumers] (Disney+ is also available now in Canada, Australia, New Zealand and the Netherlands). The market intelligence firm compares these early numbers to the early days of existing rivals like HBO Now, which reportedly grossed $23.7 million in its first two months at a time that it featured new episodes of Game of Thrones.
To be fair, HBO Now is a very different service that is much more limited in scope than Disney+, but the pressure on AT&T really hits home when it soon launches its more “apples to apples” HBO Max service in May at a monthly price tag of $14.99. That’s more than double Disney+’s stand-alone $6.99 monthly price that is clearly an offer too good to refuse for many, not to mention $12.99 for a bundle that includes Hulu and ESPN+ (a monthly number that “coincidentally” is identical to Netflix’s most popular plan). After all, according to a recent major consumer survey by PC Magazine, pricing still is paramount in the minds of consumers. (Speaking of “apples,” Apple TV+’s entry into the SVOD market at about the same time as Disney’s generates significantly less positive buzz.)
HBO Max execs undoubtedly feel the heat in this increasingly overrun SVOD market where Netflix continues to be a “must have” to most (at least to date) and Disney+ has quickly established itself as being a “door number two” for many (Amazon Prime Video is the second largest SVOD in the U.S. by subscriber count, but Prime subscriptions – in which it is bundled – are a unique animal). Ditto for execs at NBCUniversal’s upcoming SVOD Peacock, which launches in April at a price likely to be revealed at a press event later this week. Together with Netflix, Amazon Prime Video, Hulu (the number 3 SVOD in the U.S. and, oh yes, is now Disney controlled), Disney+, Apple TV+, CBS All Access, Showtime and numerous others, that’s a lot to ask for budget-minded consumers who either left bloated cable packages to reduce their monthly spends or never signed up for them in the first place (hey you mobile-first Gen Y and Z’ers out there, that would be you!). Three SVODs appear to be the breaking point for consumers (here’s my earlier math and analysis in Forbes). How many have already left other SVODs to enter Disney’s shiny new streaming video magic kingdom? Sensor Tower has no data on that count, but others likely soon will (Netflix announces its Q4 2019 financial results next week).
But here is Disney+’s greatest magic trick. Disney owns the biggest content franchises in the world. That includes Star Wars, Pixar, Marvel, Disney Princesses and its new Fox assets X-Men and The Simpsons. Most of those titles are evergreen, which means that consumers likely will covet and watch them over and over again into time immemorial. Disney Princesses have already proved that for generations. Which of the other SVODs can compete with that? Not many. More accurately, not any. That’s Disney+’s special sauce, and The Mandalorian simply may be just the cherry on top for CEO Bob Iger’s massive global marketing machine (although a very healthy cherry to be sure, as The Mandalorian quickly became the most watched original streaming series soon after launch).
AFP