The streaming wars are reaching fever pitch.
Disney entered the streaming space on Tuesday with its Disney+ offering, joining Apple and Netflix in an increasingly crowded environment.
MoffettNathanson senior analyst Michael Nathanson says getting subscribers is the crucial first step.
"This is the way Netflix has been for five to 10 years. We worry about making money later. Let's just get some subs... we'll worry about the economics down the road. Disney is trading on the anticipation of a big opportunity."
Cg42 managing partner Stephen Beck says Disney is already set to profit because it has the key ingredient: content.
"We think out of the box they're going to just really kill it. And again, it's obvious it's all about the content. It's about 'Star Wars.' It's about Marvel. It's about Pixar. It's about the Disney catalog. And that's something that the competitive set, in terms of Netflix as the main one, just can't match."
Rich Greenfield, media technology analyst at LightShed Partners, says Disney is executing a money-losing plan that some investors think won't pay off.
"Disney's got to balance new versus old. Companies like Netflix obviously are only focused on the future, there's no balancing. They're [Disney] getting more aggressive than people probably expected them to be. But this is still from an investment standpoint. Earnings estimates a year ago for 2020 were $8.30 — they're now sub-$6 and there are investors that think it could be sub-$5. So this is a very expensive, challenging proposition to execute on."
CNBC's Jim Cramer says that while he likely won't subscribe, this is adding value for consumers who will benefit from creating their own bundles.
"Twenty years ago, I would have loved it. To me, it's a "no, thank you," don't feel any need for it. It's a good value for them, and one of the things I really love about it is that not everybody is the same. I love ESPN+ ... I play fantasy football. ESPN+, without it, I just don't think I can win. To each his own. One of the things I love about this is I can put together my own bundle. My own bundle is probably going to cost me less. And that's the way of the world. I think it's super for the consumer."
Springboard Enterprises chair Kay Koplovitz says this is great value for families with kids and that Disney's strategy had that audience in mind.
"Disney+, ESPN+ [and] Hulu for $12.99 a month is really a pretty attractive bundle for a lot of people. The Disney+ I think is very attractive for families [and] for kids. I think the launch today at 6 a.m. is kind of a sign that they're going after the family audience and not launching last night at midnight as some of the other streaming services did. Kids aren't really up at midnight, but they are up at 6 a.m. oftentimes. It had a different tone to it as it was launching, and they made a play for the family."
New York Times columnist James Stewart says this is a smart move taking a page from Amazon's playbook where the opportunities for profit will open up eventually.
"They're investing for the long term. I think that's smart. They're going to get a massive base in there. And as we've seen Netflix raise prices when they can, they'll raise prices. You know, it's this kind of Amazon strategy that everybody wants to put into play, which is, trust us, this is a long-term investment. There's going to be a J-curve, we're gonna have some high upfront costs, but it's going to pay off big in the long term, and I think that's clearly a strategy."
