Disney+ has run into several problems before it even turns a week old. The service launched with a bang on November 12, taking Netflix (NFLX) stock down 0.74%. The slide slashed Netflix’s YTD (year-to-date) return at a time when it was already the worst-performing FAANG stock. Netflix has risen 13% YTD through November 18. In comparison, Apple and Facebook (FB) stocks have risen 69% and 51%, respectively, YTD. Alphabet (GOOGL) and Amazon (AMZN) have gained 26% and 17% year to date, respectively.
With Disney+, Disney (DIS) looks to be wrestling some control of the fast-growing video streaming market away from Netflix. The global video streaming market generated $97.4 billion in revenue in 2017, and that is set to reach $332.5 billion by 2025.
But in its bid to challenge Netflix, Disney has run into some early challenges of its own. At launch, Disney+ faced technical difficulties that prevented people from signing up or accessing shows on the platform. The company attributed the technical glitches to exceedingly strong demand for the service.
Disney+ accounts hacked
In addition to the technical glitches at launch, the service ran into another challenge: account hacks. Many subscribers lost control of their accounts in a mass hacking, according to media reports, presenting a new headache for Disney in its bid to create a Netflix killer.
Hacked accounts are being sold on the dark web for as little as $3, according to reports. In some cases, the hacked accounts are offered free of charge. A legitimate Disney+ subscription purchased from the company costs $6.99 per month. The company has priced the service competitively in order to gain customers quickly, considering Netflix’s cheapest plan costs $8.99.
Deal with hacking as Netflix struggles with password sharing
The Disney+ account hacking seems to have brought the company closer to a problem Netflix has struggled with for years: password sharing. As we discussed previously, a study has shown that Netflix loses $1.6 billion in revenue every year because of password sharing.
10 million subscribers in 24 hours
Disney said Disney+ had signed up more than 10 million subscribers within 24 hours of its launch. A study showed that it had attracted more than 1.0 million subscribers even before it launched. The company aims to reach 60 million–90 million subscribers by 2024.
DIS has risen 35% YTD as of November 18.