AT&T Versus Disney: Streaming Wars Winner



  • Disney, AT&T, and other large companies are battling over market share in the streaming industry.
  • Disney has managed to roll out its service successfully and has turned into a "techy" growth stock in the eyes of Mr. Market.
  • AT&T has not managed to do that, but its relative upside potential is way higher than that of Disney, which seems to be fully priced already.
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Article Thesis

Streaming is the future of television, and many major players are entering that industry that is, so far, being dominated by Netflix (NFLX). Disney (DIS) and AT&T (T) have been rolling out their respective streaming services in the recent past, and demand for both has been better than expected. The market's reaction, however, has been very different, and shares of Disney and AT&T have not fared the same at all. In this article, we'll try to find out why, and decide which is a good value at current prices.

Streaming peers comps

Source: StockRover

The Streaming Wars

Netflix is the global leader in streaming subscriptions, but large companies with deep pockets have been moving into that market, seeking to get their share of the pie. That includes Amazon (AMZN), a natural competitor since Amazon tries to be active in more or less anything related to online consumer businesses. Apart from Amazon, Disney and AT&T are recent market entrants, with Disney+ and HBO Max.

Looking at subscriber numbers at the end of the third quarter, we get the following picture:

Netflix195 million
Amazon Prime Video150 million
Disney+73 million
Hulu33 million
HBO Max9 million

Source: Forbes, chart by author

Netflix and Amazon clearly still dominate, but Disney's streaming service has become a large business as well. This is despite the fact that the service only launched in November 2019, whereas its two biggest competitors have rolled out their services 9 years ago and 13 years ago, respectively. Disney has hit the 70 million subscriber mark much sooner than expected, originally, that was the target for fiscal 2024. HBO Max, on the other hand, has so far gathered 9 million subscribers, although it should be noted that the number, when combined with HBO, is 57 million. Hulu, majority-owned by Disney, has 33 million subscribers, which isn't really too much considering the low pricing (starting from $5.99 per month) and the fact that Hulu is available in 2007. The fact that Hulu has, over 13 years, garnered less than half the subscribers that Disney+ has garnered in one year makes Hulu seem like a relatively irrelevant player in this industry. Due to the lowish price most streaming services are available at, it seems reasonable to assume that many households will eventually have subscriptions to more than one service. This is thus not a winner-takes-it-all market, but scale does still matter. So does a deep content library, and on that front, both AT&T and Disney seem to be well-positioned, despite lower subscriber numbers compared to Netflix and Amazon.


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