Subscriber Surveys Could Unsettle Netflix Investors



Netflix (NFLX) stock has gained 9.86% since Disney+ launched on November 12. The rise might indicate that Netflix investors still have faith in the company. Will Netflix withstand competition from Walt Disney (DIS)? Three subscriber surveys came out this week. The surveys might unsettle Netflix investors and hurt the stock.

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Netflix will lose subscribers to Disney+ this quarter

Cowen analysts surveyed 2,500 US consumers. The results show that Netflix is struggling to hold its own due to competition from Disney+. According to Cowen, Netflix will lose about 1.0 million subscribers in the current quarter, based on a report from Variety. Cowen expects that the company will miss its US subscriber growth target for the current quarter.

Disney+ made a powerful debut. The service signed up more than 10 million subscribers on the first day. The gains came after Disney pulled out all stops to promote the product. For example, Disney blocked Netflix from advertising on its television networks to preserve airtime for Disney+ promotions.

Losing more customers shared with Disney+

A Bank of America study found that 6.5% of consumers who have both Disney+ and Netflix plan to cancel their Netflix subscription, according to a CNBC report. Currently, about 19.4 million US consumers subscribe to Netflix and Disney+. According to the survey, Netflix risks losing 1.3 million subscribers to Disney+.

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More Netflix customers are eyeing Disney+

A Fortune survey shows that 39% of Netflix’s subscribers could be Disney+ subscribers as well by early next year. The survey also showed that Disney+ subscribers have a high satisfaction rate of 90%.

Pricing strategy is a liability

Netflix subscribers’ interest in Disney+ should be a big concern among the company’s investors.

First, Disney has priced Disney+ competitively compared to Netflix. A standalone Disney+ subscription costs $6.99 per month. Netflix’s most popular plan costs $12.99 per month. At that price, a consumer can purchase a Disney bundle that offers Disney+, ESPN+, and Hulu. Notably, Disney is waging a price war at a time when Netflix is struggling with a pricing problem. About one-quarter of Netflix’s subscribers in the US think that the service is too expensive. Therefore, the cost is the main reason that Netflix has been losing subscribers lately.

Second, Disney+’s high customer satisfaction rate indicates that Netflix might struggle to regain its customers after they switch services. In fact, most Netflix customers who canceled the service said that the programming was dull.


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