It's unclear how many viewers churned off Disney+ after the first season of "Mandalorian," but Wall Street analysts agree that the Star Wars series was a key driver of paid subscriptions for Disney+.
Bank of America analyst Jessica Reif Ehrlich says "Mandalorian" is "hugely popular and a critical show" for Disney.
Last year, Disney teamed up with Verizon (VZ) to offer Disney+ for free at its launch, waiving the cost of $6.99 a month or $69.99 a year. That deal ends on Nov. 12, a couple of weeks after the start of the second season of "The Mandalorian." The timing seems to suggest Disney is hoping subscribers will stick around and pay for a subscription to watch the entire second season.
"We think having 'The Mandalorian' season two coming out before the first batch of the Verizon promos expire will be a positive,"said Rosenblatt Securities analyst Bernie McTernan.
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Recently, Disney announced a reorganization to reflect its focus on its streaming media business. The move gave Disney stock and immediate lift and comes as the theme parks segment continues to deal with pandemic restrictions. Several of its theme parks reopened, but with limited capacity. And Anaheim, Calif.-based Disneyland remains closed for a least several more weeks.
Frost & Sullivan analyst Dan Rayburn says Disney had already been investing heavily on its streaming services. "Now they're reinforcing how important their direct-to-consumer streaming services are," he said.
They have some way to go to catch up with rival Netflix. Worldwide, including Hulu and ESPN+, Disney has 104.5 million subscribers vs. Netflix's 195.15 million. Analysts say Disney is well-positioned to make up some ground. Disney plans to launch Hulu globally as Star. They're expected to reveal details of that streaming service at its virtual Investor Day on Dec. 10.
"We think that's going to narrow substantially over the coming 12 to 24 months," said McTernan. "Don't forget that Disney went out and bought Fox for its content and knowing that you need to take content globally for streaming. The Fox content is going to be one of the key aspects of the Star international programming lineup.".....
Ultimately, new content will be the long-term driver of subscriber growth and retention for Disney's streaming services in the U.S. and abroad. Disney has more than 50 new shows and movies slated for Disney+.
But like other studios it had to shut down production when the pandemic hit. In the interim, Disney turned to its large library of classics.
And as theaters remain closed in large markets like Los Angeles and New York, Disney decided to offer its blockbuster "Mulan" on Disney+ for $29.99 on Sept.4, after it had been delayed since mid-March.
Analysts say Disney wanted to recoup some of its investment in the big-budget production rather than let it sit on the shelf indefinitely. It's not yet known how many people bought the movie.