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Disney plus Expected to Be Profitable in Five Years

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Apr. 15 2019, Published 12:42 p.m. ET

Disney Plus aiming for profit by 2024

Walt Disney (DIS) wants its flagship streaming video service, Disney Plus, to be profitable in five years. Disney Plus is set to launch in November and cost $7 per month, cheaper than Netflix’s (NFLX) $13 standard plan. Disney Plus is also set to cost less than Google’s (GOOGL) YouTube Premium, which costs $12 per month.

Although Disney is entering a crowded market dominated by Netflix, it hopes to add subscribers quickly and make Disney Plus profitable by 2024. Disney Plus is expected to have 90 million subscribers by that time, meaning it would be generating ~$630 million in monthly revenue or ~$2.0 billion quarterly.

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Disney to spend $2.0 billion on original programming

Disney is planning to spend $2.0 billion on original programming by 2024 to set its Disney Plus video service apart. Netflix and Amazon (AMZN) have also adopted original content strategies, as have video streaming providers Facebook, Apple, and AT&T (T). Facebook’s ad-supported streaming video service, Watch, features original content from an array of media partners, and last month, Apple unveiled its long-anticipated video service, Apple TV Plus, which is set to arrive in fall. AT&T (T) runs several video service brands and is on track to launch another one later this year.

Disney looks keen to reach profitability faster than Hulu, which is still seeing losses. Hulu is expected to post a loss of $1.5 billion this year, according to Reuters. Disney had a profit of $2.8 billion in its fiscal first quarter (ended December).

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