The Streaming Wars Heat Up: Just How Big a Threat Is Disney to Netflix?

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“Once again, Netflix is in the driver’s seat,” one industry expert says

netflix vs disney
Disney just surpassed Netflix in global subscribers.

Investors are not an easy crowd to shock, but Disney CEO Bob Iger managed to induce at least two audible gasps when unveiling his company’s long-awaited Disney+ streaming service on Thursday afternoon. The first was the news that “The Simpsons” would move all of its 30 seasons over to Disney+ — a sign of just how extensive the company’s library is since its $71 billion Fox acquisition —  and the second came with the $6.99 monthly subscription price. (Netflix, for comparison, costs $12.99 per month for its standard package.) The whole event amounted to Iger firing a warning shot: This is what a true Netflix competitor looks like. But is it a Netflix killer? Not likely, according to several media and business experts. Instead, once Disney+ launches on November 12, a new streaming landscape is expected to emerge: Netflix atop the hill, followed by Disney+, with a wide chasm separating the two services and the rest of their competitors. “The question is, will anybody drop their Netflix subscription because of Disney and these new services? Probably not, at least for now,” Tom Harrington, senior research analyst with Enders Analysis, said. “Obviously, Disney+ is the one that looks most likely [to topple Netflix], but even that is more of a family service. It’s not a like-to-like comparison.” Indeed, Disney is taking a decidedly more niche approach to its streaming service — with no mention of mature content like the R-rated “Deadpool” franchise.” In addition to “The Simpsons,” Disney+ will feature the kid-friendly staples like “Frozen” and the “Toy Story” franchise, as well as nine exclusive TV shows and films like the “Star Wars” spinoff “The Mandalorian,” a live-action “Lady and the Tramp” and “High School Musical: The Musical: The Series.” Harrington believes there’s room for such a more targeted service in the streaming ecosystem — because Netflix will continue to dominate the market. “All these services are coming out, and they’ll initially be playing complementary roles to Netflix,” he said. “And they’ll be secondary, or even tertiary services, in most households. Once again, Netflix is in the driver’s seat.” In fact, Netflix has held the belief for years that it’s not operating in a one-service-wins-all ecosystem. The streaming service’s long-term view on competition is that “because the entertainment market is so broad, multiple firms can be successful,” according to its investor site. Using HBO as an example, Netflix has said that people will continue to subscribe to both because they have different, exclusive quality content. “In some way, [Netflix and Disney] are two sides to the same coin. They’re both going to be successful, because their strengths are in opposition,” Brian Frons, former president of ABC daytime and current UCLA Anderson professor, said. “Disney is about depth of quality and Netflix is about quantity.” However, the early signs suggest that Wall Street didn’t buy into the “both Netflix and Disney can win” stance. Disney shares surged 11.5% to a new all-time high of $130 on Friday, while Netflix shares dropped 4.5%. Disney’s Thursday presentation in Burbank, which brought out heavy hitters such as Marvel Studios’ president Kevin Feige, LucasFilm head Kathleen Kennedy, Pixar chief Pete Docter and director-producer Jon Favreau (twice), emphasized just how strong, and massive, the Disney vault now is. The three-hour-plus show began with Disney CEO Bob Iger walking out in front of a gargantuan big screen that listed everything Disney now owns after its $71 billion Fox deal — which is, basically, everything now — before quipping “Did we miss anything?” Unlike Apple’s own streaming-service launch event a few weeks ago, Disney presented a clear vision for Disney+: a one-stop shop where fans of Marvel or “Star Wars” can also throw on an iconic Disney movie for their kids whenever they want. Still, Netflix has the edge over its deep-pocketed rival in a number of ways. Foremost is its first-mover advantage. Netflix had 140 million global subscribers by the end of 2018. Disney+, on the other hand, is expected to reach 55 million subscribers by 2023, according to a research note from MoffettNathanson on Friday; Netflix passed the same threshold in mid-2014. Netflix’s worldwide reach is vital because it gives it a leg up on attracting talent, according to Paul Hardart, former Warner Bros. executive and current head of the Entertainment, Media and Technology Program at New York University. “The power of Netflix is there are few places you can go to say, ‘I want my film or documentary or show to be global immediately,’” Hardart said. “Beyoncé can say, ‘I want my new documentary to reach the world,’ and 140 million people will see it this week, boom.” That huge subscriber base also allows Netflix to spend more — a lot more — than its competitors on content. Disney said it’ll spend $1 billion on programming next year, and “mid-$2 billion” per year by 2024. Netflix, meanwhile, is expected to spend $15 billion on content in 2019. That’s by design. Netflix has built a global following by investing in high-profile shows like “Narcos” and “Stranger Things” that it hopes will keep millions of people tethered to its service. “Right now, [Netflix is] spending all this money, they’re buying content as fast as they can to build an indomitable position that WarnerMedia and Disney have to chase,” Hardart said. In short: Disney+ looks poised to succeed because it has several big-time, international draws — something the other new entrants can’t lean on. It’ll likely “live in harmony” with Netflix, Hardart said, as an affordable family-friendly streaming alternative. But the odds Disney or any other service will supplant Netflix as the dominant streamer remain long — something that should give Hastings a bit of solace. “There’s space, certainly in the U.S., for new services. Whether they knock Netflix from the top seems unlikely,” Harrington said.