Barclays has downgraded Disney from an “outperform” to an “equal weight” rating and called for bold changes to reverse slowing growth at the streaming service Disney+.
Quoted by Reuters, Barclays analyst Kannan Venkateshwar said: “While the company (Disney) appears to be targeting one new piece of content a week, not every piece of content has the same franchise value or visibility”.
In Barclays’ view, the slowdown in Disney+ subscribers could not be solely attributed to a pull forward in additions in 2020, when streaming platforms grew in popularity during Covid-19 lockdowns. To achieve its target of 230-260 million by the end of fiscal 2024, Disney+ will need to more than double its rate of current rate of growth in order to keep up with Netflix.
While Disney+ has one of the most comprehensive portfolios of content among the leading streaming services, competitors such as Netflix, Amazon Prime and Apple+ have adopted a different strategy by investing heavily in content in order to attract more subscribers.
Following the downgrade, shares in Walt Disney fell by 3%. As previously reported by Broadband TV News, Disney+ ended June with 116 million subscribers, or over double the 57.5 million posted a year earlier.
