Title: 2025: How Streaming Revolutionizes Disney's Stock
Disney's stock performance in 2025 has been a rollercoaster ride, with a modest 3% decline year-to-date while still up by a substantial 20% since January 2024. Despite these mixed results, the company's burgeoning streaming business is expected to drive its stock growth this year. This anticipation stems from continued subscriber growth, stronger pricing strategies, and strategic moves like introducing ad-supported tiers.
The direct-to-consumer segment tasted significant success in the last quarter, raking in $5.8 billion in revenue, a 15% year-over-year increase. Operating profits for this segment skyrocketed, standing at $321 million compared to a $387 million loss during the same period in 2023. Impressively, Disney+ added 4.4 million subscribers, excluding Disney+ Hotstar subscribers from India. This translates to 123 million subscribers on Disney's core offerings, representing a 9% increase compared to the previous year. Meanwhile, Hulu witnessed an around 7% subscriber growth, with 52 million subscribers as of 2025.
Stronger pricing has been a key driver in revenue growth. For instance, the Disney+ ad-free plan bumped its price by $2 to $16 in October 2023, and then again in October 2024. This price hike underscores consumer engagement and willingness to absorb higher costs.
Disney, inspired by Netflix's success, has adopted its strategies. Disney's ad-supported tier is popular, with around half of US subscribers opting for it. Moreover, Disney has been intentionally pushing users towards ad-supported plans by making ad-free options more expensive.
The broad streaming industry has embraced ad-supported tiers as they deliver higher revenue per user due to both subscription fees and advertising dollars. Ad rates may also favor Disney, owing to its family-oriented, premium content. Furthermore, Disney is experimenting with the paid-sharing feature, which was introduced in the US in September 2024. Consumers who want to add users outside their household can do so for an additional $7 per month.
While Netflix leads the streaming race with 283 million global subscribers, Disney has about 175 million subscribers across Hulu and its core Disney+ offerings, growing at a steady 8% year-over-year. Although Netflix indicated that it will stop reporting subscriber figures from 2025, Disney could continue to profit from paid-sharing and its diverse range of offerings, including Disney+, Hulu, and ESPN+.
Disney's marketing costs for its streaming business are declining as the platform matures. Disney offers Disney+, Hulu, and ESPN+ bundled for $17 per month, creating a stickier service, boosting customer retention, and reducing churn. This bundling strategy could lower costs while creating cross-selling opportunities that Netflix may not be able to replicate.
Moreover, Disney's Intellectual Property (IP) library is a strong asset. Iconic franchises like Marvel, Star Wars, Pixar, and Disney's animation assets ensure a steady supply of top-quality content for Disney's streaming platforms, bolstering its streaming position.
Disney's stock has faced inconsistent returns since 2021; it tanked in 2021 (-15%), 2022 (-44%), and 2023 (4%), then surged 24% in 2024. Despite volatility, Trefis' High-Quality Portfolio, with 30 stocks, has consistently outperformed the S&P 500 since 2021, offering better returns with less risk.
In summary, Disney's streaming business is performing well, driving stock growth. Its continued subscriber growth, successful pricing strategies, and strategic partnerships make it a potential stock pick for investors in 2025.
Based on the strong performance of Disney's streaming business, the company's direct-to-consumer segment generated a significant increase in revenue, with 'dis revenue' reaching $5.8 billion in the last quarter, marking a 15% year-over-year increase. This positive trend in 'dis revenue' is a sign of investor interest, potentially influencing 'disney's dis valuation'.
With subscriber growth, stronger pricing strategies, and successful introduction of ad-supported tiers, Disney's streaming business is expected to boost its stock performance, potentially leading to an increase in 'disney's dis valuation'.
