Disney+ could lose a lot of Verizon promo subs in Q4

Disney+ has heavily outperformed its early subscriber growth forecasts but there’s potential for a significant step back in the fourth quarter.

When Disney+ launched on Nov. 12 last year, Verizon offered many of its subscribers 12 months free of the streaming service. The promotion extended to both 4G LTE and 5G unlimited subscribers along with new Fios Home Internet and 5G Home Internet customers.

Now Verizon is selling Mix & Match unlimited wireless plans that combine 5G service with access to Disney+, ESPN+, Hulu and Apple Music. The provider said existing customers currently receiving 12 months access to Disney+ can move to the new Play More and Get More Unlimited plans with The Disney Bundle included, or for $6 per month they can stay in their current plan and add both ESPN+ and Hulu.

Of course, Verizon’s Disney+ promo subscribers can also just quit the service instead of turning into paying subscribers.

RELATED: Verizon adds ESPN+, Hulu to Disney deal for wireless subscribers

In February, Disney said it ended its fiscal first quarter on Dec. 28, 2019 with 26.5 million Disney+ subscribers. The company said that about 20% (about 5.3 million) of those subscribers came in through Verizon. As Bloomberg pointed out, that number is likely higher today.

When Disney reported its most recent earnings in August, the company said that Disney+ had 60.5 million subscribers, which has already broken past the low end of the 2024 guidance the company provided in 2019.

Disney+ continues to expand into more international markets and appears to have lots of runway left for subscriber growth. In a research note, analyst Michael Nathanson said he expects Disney+ to have 155 million worldwide subscribers – including more than 50 million domestic subscribers – by 2024.

However, if a sizable amount of the 5 million or more Verizon promotional subscribers decide to jump ship after Nov. 12 or later, Disney+ could experience a significant customer churn event in the fourth quarter that could disrupt the service’s astounding growth rate.