Where Does Netflix Stand Now Since The Disney+ Launch???
Earlier this year, a survey by the website Streaming Observer in partnership with data analysis firm Mindnet Analytics stated as much as 14.5% of Netflix's current U.S. subscriber base of 60 million said they are considering canceling the service in order to sign up for Disney+. This sounded about right as Disney is forecasting between 60 million and 90 million subscribers to its streaming service within five years. Subscribers to all of Disney's services would get Disney+, Hulu, a multichannel live-TV service, plus live sports via ESPN+.
But as long as Netflix is spending more than the competition on content, in particular original content, in theory they should continue to have the edge over the competition. On average, Netflix is spending $10 billion / year on original content, while the competition like Disney, Amazon and Apple are spending on avg. $1 billion / year on original content. Which is probably why when it comes to competition from Disney's new Disney+ and Apple TV+ streaming service, Netflix says that it doesn't fear the competition.
However, at $6.99 per month or $69.99 per year, Disney+ is significantly cheaper than Netflix, which charges $12.99 for its most popular standard HD plan. So it should probably shouldn’t have been a surprise that when Disney+ was launched month ago, despite technical errors that prevented some users from connecting with the service, 10 million sign-us occurred in 48 hours.
Credit Suisse recently stated that Disney+ Netflix has not taken a notable subscriber loss so far based on app download data. In addition, many Analysts on Wall Street don't believe Netflix will lose many subscribers to Disney’s service. However, there is one analyst on Wall Street that has a different opinion.
Needham analyst Laura Martin downgraded Netflix shares to “underperform” from a “neutral” rating on Tuesday, arguing the the intensifying streaming market will cause Netflix to lose subscribers.
Martin argues that Netflix needs a lower-priced tier of its own in order to maintain its market position and support its stock, and given the Company’s balance sheet, Netflix should consider supporting this tier with advertisements.
Martin suggests that ads could be one option that Netflix subscribers can purchase from, along-side ad-free tiers. She mentions adding six to eight minutes of commercials per hour could allow Netfxlis to price this option between USD 5.00 to USD 7.00 per month, competing against cheaper streaming services such as Disney.
Regardless of which camp you are in, the zones to be mindful of are the following with the $350 band serving as a major resistance/support band.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.
