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Disney+ magic fades: Barclays downgrades Walt Disney after three years

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A smartphone with the “Disney” emblem is seen on a keyboard in entrance of the phrases “Streaming service” on this image illustration taken March 24, 2020. REUTERS/Dado Ruvic

Oct 18 (Reuters) – Walt Disney’s inventory obtained a uncommon Wall Avenue downgrade on Monday, as Barclays referred to as for daring adjustments from the media big to reverse slowing progress at its Disney+ streaming service.

Disney Chief Government Officer Bob Chapek final month hinted at a slowdown in Disney+, saying fourth-quarter world paid subscribers will develop by “low single digit” tens of millions in contrast with an increase of 58.5 million within the earlier three months.

Disney+, which has one of many richest portfolios of media content material, had a blockbuster launch in 2019; it attracted new subscribers with its hit “Star Wars” and “Avengers” franchises.

Rival streaming platforms corresponding to Netflix Inc , Apple TV+ and Amazon Prime Video have had a distinct method. They invested closely on unique content material to attract in subscribers.

“Whereas the corporate (Disney) seems to be concentrating on one new piece of content material every week, not every bit of content material has the identical franchise worth or visibility,” Barclays analyst Kannan Venkateshwar mentioned.

Barclays additionally mentioned the slowdown in Disney+ subscribers couldn’t be solely attributed to a pull ahead in additions in 2020, when streaming platforms gained reputation as folks hunkering down at dwelling sought leisure.

To attain its goal of 230 million to 260 million Disney+ subscribers by the tip of fiscal 2024, Disney might want to greater than double its present tempo of progress to not less than the identical stage as Netflix , in keeping with Barclays.

Netflix, which is because of report its quarterly outcomes on Tuesday, had 209 million subscribers as of the quarter ended June. Disney+ had 116 million paying prospects.

Disney shares, which haven’t been downgraded by any brokerage to this point this yr, fell about 2% in early buying and selling.

Reporting by Aniruddha Ghosh, Tanvi Mehta and Eva Mathews in Bengaluru; Writing by Subrat Patnaik; Modifying by Shinjini Ganguli

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