Disney's service will be more modest in terms of price and amount of content compared to Netflix, Quadrani added, though the key determinants of its success will likely be the quality of its movies and shows.
"Disney has already shown some disposition to forego short-term revenues in order to develop the streaming business, by pulling content from Netflix once its contract expires at the end of the calendar 2018 film slate," Quadrani said. "While Disney management has not yet commented on a specific price, the company has stated that Disney+ will be 'substantially below' the price of Netflix."
To be sure, it could take a number of years for Disney to ramp the new service across the globe, and questions remain over when existing content rights will revert to Disney in a handful of major geographies. But even in the U.S., where Quadrani sees about 45 million subscribers in the long run, J.P. Morgan is "confident that there is a substantial market for Disney+."
The Walt Disney Company's stock rose 0.3 percent Wednesday following the J.P. Morgan note. The media giant's stock is up more than 8 percent over the past 12 months, ahead of the S&P 500's gain of 2.2 percent.
Disclosure: Comcast, which owns CNBC parent NBCUniversal, is a co-owner of Hulu.
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