The release of Disney+ on Nov. 12 was so widely popular that it caused its system to have difficulties. The next day, Disney (NYSE: DIS) said the number of signups on the first day exceeded 10 million. With an initial offering of 500 movies and 7,500 episodes at $6.99 a month or $69.99 per year, Disney+ offers a significant value proposition to consumers.
Since announcing the release of Disney+ on April 11, Disney's stock is up 16.5% to $151.58. Disney did an excellent job unveiling the streaming service by giving the market information to quantify the impact on the company's revenue and profit. Disney said it expects 60 million to 90 million signups within five years. At the midpoint of the range of subscriptions, the potential revenue contribution Disney+ will have in five years will be $6.3 billion annually.
Disney owns a majority stake in Hulu, which has reached 28.5 million subscribers, as well as ESPN+, which is fully owned and has over 3.5 million paying customers. Adding Disney+ provides a complimentary benefit because it can now offer a bundle of all three services at $12.99 per month. The price is still below Netflix's (NASDAQ: NFLX) basic plan of $14.99/month.