(Reuters) - Shares of Walt Disney Co touched an all-time high on Friday after Wall Street analysts said the aggressive pricing of its new video streaming service could help it better compete with Netflix Inc.
Netflix’s shares fell about 4 percent after Disney priced its streaming service, Disney+, at $6.99 per month, below the video streaming pioneer’s basic plan of $8.99.
“Investors find a lot of promise in Disney’s offerings because it’s well positioned to fight the likes of Netflix for consumers’ money,” said Clement Thibault, analyst at global financial markets platform Investing.com.
Shares of Disney jumped 10 percent to $128.26, adding $21 billion to the company’s market capitalization of $209 billion on Thursday.
J.P. Morgan analysts also noted that Disney+’s interface appears similar to that of Netflix with personalization of user profiles, recommended content, search capabilities and parental controls.
Disney+ will launch on Nov. 12 in the United States, featuring content from a host of Disney brands including Marvel, Star Wars and Pixar as well as recently acquired Fox properties such as “The Simpsons” and National Geographic programming.
Disney said it expects to attract between 60 million and 90 million subscribers and achieve profitability in fiscal year 2024. It plans to plow a little over $1 billion in cash to finance original programming in fiscal 2020 and about $2 billion by 2024.
“It’s still very early on, but the streaming war has officially begun. By fighting back with a competitive offering, Disney at least gives itself a chance to win in the streaming industry, rather than just losing user after user to other streaming services,” Thibault said.
Reporting by Vibhuti Sharma in Bengaluru; Editing by Anil D’Silva
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