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Disney + ranks Netflix as streaming manager – analysts



Analysts appear to be betting on Disney + to match, if not the best, Netflix as a worldwide streaming leader over the next three to four years.

With the seemingly endless stream of new streaming services, the rules of the game can be confusing. However, a true battle seems to be taking shape over the controversy. The main event seems to be the relatively young company with a long history of streaming dominance compared to the time-tested giant that is still in the early stages of their streaming life.

Netflix versus Disney, who falls? None of them. Who will win? Both. Who rules as streaming master? Signs point to Disney.

There is no doubt that Netflix has been a leader in streaming for many years. Not only was it the big fish in the small pond when it switched to streaming, it basically created the pond. Over the years, the company has been responsible for a number of the most popular TV and film events and has forever changed popular culture. These include hit series such as: Stranger Things, YOU, Orange is the New Black, When They See Us, The Umbrella Academy. Along with hit movies like Irishman and Spenser Confidential.

Over the years, Netflix has seen many competitors enter the market with varying degrees of success: AppleTV +, Amazon Prime Video, Peacock, Discovery +, HBOMax and the upcoming Paramount + (which is taking over for CBS All Access). The long-term success of these services is still very much in the air. Expect a number to continue to grow, another group is likely to end up with others, and the rest will join people like Quibi, gone and quickly forgotten.

And then there’s Disney +, devised by former Disney CEO and current CEO, Bob Iger. Disney’s direct-to-consumer division includes Disney +, Hulu, ESPN + domestic and Disney +, HotStar and Star internationally.

Disney’s media empire is vast and includes Walt Disney Pictures (Mary Poppins, who framed Roger Rabbit, Honey I Shrunk the Kids, along with live-action remakes of Lion King, Aladdin, Beauty and the Beast, Mulan, and more). Walt Disney Animation (Frozen, Moana, Tangledand more), Pixar (Toy Story, Inside Out, Incredibles, Soul, and more), Lucasfilm (Star Wars, Willow, Indiana Jones), Marvel (Avengers, Iron Man, Black Panther, and more), 20th Century Studios (formerly 20th Century Fox, which includes The Simpsons, Bob’s Burgers, Deadpool, Alien franchise, X menand billion dollars in other content), National Geographic, Searchlight Pictures and the linear networks ABC, ESPN, FX, Disney Channel and Freeform, to name a few.

Investors have studied consumer behavior around streaming, and the consensus is that most consumers would be willing to pay approx. $ 30 per month for streaming. This will mean two to three services per. Customer. While AppleTV +, Amazon Prime Video, Peacock and Paramount + are vying for third place, it looks like streaming executives will be Netflix and Disney +.

Hulu is purposefully omitted as it serves as a sister service to Disney +.

The core strengths of the two services are …
– Netflix essentially created a world of streaming and has been the undisputed leader in new content creation through its thirteen years of growth.

– Disney has been worth almost centuries of content and has acquired some of the most popular brands in the field of entertainment.

While these are the first strengths of any business, both of these services are growing beyond these general characteristics. As Netflix continues to grow, what was once considered new content is starting to add up to create a recognizable and powerful library. Netflix is ​​also strengthening its library of licensing agreements, though some of their biggest draws have been moved to other services. An example of this is the very successful series The office, who recently moved from Netflix to Peacock.

Disney not only relies on its deep library of family favorites, but has launched a massive production machine ready to provide long-awaited new content for the service. Mandalorianen has been a huge win for Disney, and the next two years are full of new series, movies and specials.

Former Disney CEO Bob Iger with current Disney CEO Bob Chapek

This investment in new content from Disney is what drives investors’ attention along with the forecast-breaking subscriber growth that Disney + has seen in its short lifespan.

Disney plans to invest between $ 14 and $ 16 billion annually in new content across Disney +, Hulu and ESPN + by 2024. This is roughly on par with Netflix’s 2019 content spending, which was around $ 13.9 billion.

Soon, Disney will match Netflix’s content creation, all while sitting in the industry’s most valuable library. Disney will be able to grow from the vast array of properties they own, along with creating new content and using the strength of their media networks, theme parks and retail department to promote these projects.

Disney has a controlling stake in Hulu and will soon own the entire service

In early December 2020, Disney announced that it had amassed more than 86 million Disney + subscribers and met their five-year forecast in just one year. Hulu had reached 38.8 million subscribers and ESPN + reached 11.5 million. To put Disney’s total streaming subscriber number above 137 million.

Netflix added 37 million subscribers in 2020 and ended their fiscal year with a total of 200 million subscribers worldwide. The advantage of almost a decade and a half of streaming is the ability to gather a large number of subscribers. The downside is that growth slows as the pockets of available customers shrink.

Disney is growing faster than Netflix, but it can be attributed to Disney + being a new service, which means it has a lot of room to grow. At the same time, Netflix has a larger subscription, but that can be attributed to the fact that it has been adding customers for thirteen years – ten times longer than Disney +.

So the question is still, which future is brighter?

Right now, it seems that the investment community sees Disney as the better choice. Analysts see a bright future for both streaming services, but Disney’s massive and multigenerational library, their recent streaming-focused business transformation, their huge investment in new content and their wide range of popular properties combined with their initial success in attracting subscribers have been given the Disney edge.

A Wall Street analyst has predicted that Disney will darken Netflix in the number of subscribers by 2023, and a number of analysts have moved Disney’s stock from team status to purchase. The stock closed Friday, January 22, at $ 172.78 per share. Shares. Citigroup analysts have set Disney’s share price at $ 205, about 16% above where the stock has settled over the past week. Wall Street analyst UBS has raised the target price for Disney’s stock to $ 200, saying they believe Disney will achieve a scale similar to Netflix by 2024.

Disney Pixar has created some of the most popular animated films ever

Disney’s stock price has grown rapidly since the pandemic-related decline in March 2020. Although Covid-19 has hampered Disney’s parks, experiences and products, one of the company’s most profitable and well-known divisions, the stock price has reached all-time highs this past month. This is primarily due to the strength of their streaming service and the expected rapid recovery of their theme parks and cruise ships as Covid-19 numbers begin to decline.

Another advantage that Disney has over Netflix is ​​that they own some of the most popular intellectual properties, this creates pricing power and allows Disney to spend less per. Subscriber to content. This will lead to financial overtime. Think about it, hypothetically Disney can create a series about a popular character like Woody from Toy Story without having to pay license fees for the property. They also do not have to spend much on advertising for the series, as the character is already known all over the world.

This benefit quickly adds overtime and bodes well for Disney’s future. While Netflix would have to pay licensing fees to create a new series with a popular character or create a brand new character and spend time and large sums on making the public familiar with no guarantee that the project would be well received.

This points to the brilliance of Bob Iger and his foresight to buy Pixar, LucasFilm, Marvel and 21st Century Fox during his tenure as CEO. The strength of these features goes far beyond the content increase for the library. They offer endless possibilities for creating new content with an already established fanbase, saving the company a huge amount of money.

The Beemoten, which is the Walt Disney Company, also allows for a low monthly fee for Disney +. Selling bundles or specialties currently costs the standard Disney + plan $ 6.99 each. Month in the US and rises to $ 7.99 in March 2021. The standard Netflix plan costs $ 13.99 per month. Month. Since Disney has many revenue streams (theme parks, box office, merchandise, licensing deals, live theater, and a massive real estate portfolio), they can offer their service at a low price. Apart from streaming, Netflix has no other major revenue opportunities. This has always been a problem for Netflix compared to Disney as well as AppleTV + and Amazon Prime Video, both of which are some of the most successful companies in the world, even without their streaming service.

Disney has also impressed investors with their growth abroad. Disney + joined Hotstar in Indonesia (the world’s fourth most populous country). Hotstar was owned by 20th Century Fox and was bought by Disney when they bought the parent company many years ago. Hotstar is a local favorite in India and is home to a number of popular local series. Disney decided to combine Hotstar with Disney + and offer the two services as one. This feature already has the network Disney + 2.5 million subscribers in Indonesia compared to only 850,000 subscribers on Netflix.

This is a pretty big example of the strategic international rollout of Disney +. The expansion strategy is very localized, Disney is not involved in a one-size-fits-all model. Disney +, which is available in Canada or the United Kingdom, is very different from Disney +, which is found in Latin America, which is different from Disney +, which is found in India, all of which look different from Disney +, which is available in the United States.

The core content of Disney is the same, but the local additions and efforts to respect cultural norms make each region unique.

Since so many streaming services were introduced recently, there are many examples of companies that have done it right and others that have stumbled. It seems that Disney has done the right thing so far.

There are no guarantees in the entertainment industry, and analysts’ forecasts are simply that, forecasts. It seems that Netflix, the original streaming manager, may finally have some legitimate competition. If many of the experts are to be believed, Disney could possibly come out as the leader in the industry faster than anyone had expected, even just a year ago.

Regardless of who gathers the most subscribers, which stock price has risen the most, or who may demand the highest return on investment, the future of both Disney and Netflix looks bright. The true winner will be the consumer, as the battle is likely to help control price increases, and the creative race to the top should spur new, high-quality content.

As Disney and Netflix fight for bragging rights, the real question remains, which of the other streaming services will go the way of Quibi and which will fill the vacuum for third place? No one knows, but the match will definitely be worth the price of admission.


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