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Should Netflix Be Wary of Competition from Disney+?

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Disney’s streaming service

The Walt Disney Company (DIS) is launching its streaming service, Disney+, in November 2019, offering customers another streaming option amid the dominance of Netflix (NFLX) and Amazon (AMZN). However, many analysts reportedly don’t believe Disney’s streaming service will threaten Netflix or Amazon Prime Video given their value propositions, subscriber bases, and vast worldwide presences.

Other streaming service providers Viacom (VIAB), CBS (CBS), Comcast’s (CMCSA) NBCUniversal, AT&T (T), and Apple could face competitive pressure from Disney+. AT&T’s WarnerMedia is also rolling out its streaming service in late 2019, while NBCUniversal is debuting its streaming service in early 2020.

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Netflix gains over Disney

Disney+ is likely to gain ~60 million–90 million global subscribers by fiscal 2024. Reportedly, Netflix is expected to have 200 million subscribers by 2024, more than Disney’s global subscriber base of ~75 million by fiscal 2024, with 25 million subscribers in the United States only. Netflix currently has a global paying subscriber base of nearly 139.3 million as of the end of December following its addition of 8.8 million subscribers in the fourth quarter of 2018.

Disney is planning to invest over $1 billion in original programming in fiscal 2020 and ~$2 billion by fiscal 2024, as the company plans to win more subscribers to combat its existing digital rivals Netflix, Amazon Prime Video, Hulu, and AT&T’s HBO Now.

In comparison, Netflix spent $3 billion on original content in 2014 and invested more than $8 billion in original programming in 2018. Amazon also spent more than $4 billion on its content budget in 2018. Hulu has reportedly spent ~$2.5 billion on content in 2018, the same as in 2017.

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