By Erich Schwartzel
LOS ANGELES -- Walt Disney Co.'s flagship streaming service has signed up 10 million users, the company said the day after Disney+ launched.
Disney had been offering subscriptions for several months before Tuesday's launch, including some at a significant discount.
Investors were encouraged by the numbers as Disney shares closed at an all-time high Wednesday. The stock rose 7.3% to finish at $148.72, and it now has risen more than 35% in 2019. Disney, a member of the Dow Jones Industrial Average, was responsible for about 75% of the index's gains Wednesday.
Reaching 10 million subscribers about 24 hours after the formal launch appears to be a robust start for the company, but it's unclear how much each of those customers is worth to Disney. One of the company's most popular subscription promotions sold a three-year deal for roughly $141, or less than $4 a month.
A deal offering a free year of the service to certain Verizon Communications Inc. customers is also likely contributing a significant number of sign-ups.
Speaking at a conference in Barcelona on Wednesday, Verizon's finance chief said about 17 million accounts at the carrier are the kind of unlimited plans that are eligible for the Disney+ promotion.
The CFO, Matt Ellis, declined to say exactly how many of the carrier's customers have begun using the video streaming service, but said "we would expect a pretty significant number" of eligible subscribers to take advantage of the offer.
Disney entered an already-competitive field that is only going to get more crowded in the coming months. Netflix Inc. dominates with 61 million domestic subscribers and another 98 million overseas. Disney+ is so far only available in the U.S., Canada and the Netherlands, but is to expand to foreign markets in the coming months.
Amazon.com Inc., CBS Corp. and even Disney's own Hulu have entrenched online-video presences. Apple Inc. recently introduced Apple TV+, which at $4.99 a month is even more affordable than Disney+, though its limited starting lineup of just nine shows makes it a less-than-formidable competitor, at least for now.
AT&T Inc.'s HBO Max and Comcast Corp.'s Peacock, slated to launch next year, will further test the public's appetite for subscription entertainment packages. Last week Disney disclosed that its ESPN+, which offers sports-oriented programming for $4.99 a month, has 3.5 million subscribers.
Disney has told investors it expects Disney+ to have between 60 million and 90 million subscribers by the end of fiscal 2024, at which point it should achieve profitability.
The Disney+ launch was marred by technical glitches that slowed streaming and kicked users out of the app for several hours. The issues, which were resolved by the end of the day, were driven by servers overwhelmed by the demand of continuous streaming and a large number of sign-ups.
Disney has priced its service at $6.99 a month -- around half the cost of Netflix's most popular plan -- hoping to attract a large number of new users right out of the gate.
Disney+ is counting on two primary kinds of programming to draw users: original shows such as the Star Wars spinoff "The Mandalorian" and a reboot of "High School Musical," and an archive of classic Disney titles, ranging from animated classics like "Bambi" to live-action features such as "Sister Act." The service includes about 500 movies and 7,500 TV episodes in total.
Disney said it would not issue further updates on its subscriber figures outside of quarterly earnings calls with investors.
Sarah Krouse contributed to this article.
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