The shareholders must sigh with relief.
The great disclosure came for the House of Mouse's new streaming service, but Netflix Chief Executive Reed Hastings seems to have been right Disney + (NYSE: DIS) all the time for Disney's potential rival. This is not a death threat, not even a large part of a thorn in the country for the leading streimer.
In case you missed it, here are key facts about the new Disney + service.
With such a price, Disney + appears to undermine Netflix, whose most popular package now costs $ 1
Hastings' Disneys for Disney
Again, the Netflix Chief has been asked about his earnings to think about Disney's upcoming streaming service, as well as his concerns about other competitors. But he always asks questions, ignoring threats.
Here's what he said more than a year ago after Disney's Fox offer became public:
Then they also assembled Disney's service directly to consumers, which we think will be very successful because Disney has super-strong brands . So, we'll see. We do not see this as a threat to us more than Hulu was, but it is a great opportunity for them.
Hastings even continued to pay Disney compensation, saying he would subscribe to his new service. 19659003] More recently, Hastings said in a letter to shareholders' profit:
We earn time on the screen of both mobile and TV users, away from a very wide range of competitors. We compete with (and lose) Fortnite more than HBO … Our focus is not on Disney +, Amazon (NASDAQ: AMZN) or others but on how we can improve our experience for our
The co-founder of Netflix has always been something like the CEO of Big Lebovski in the Silicon Valley, who regularly appears as a superhigh and does not worry. But it makes sense here and has been right many times before, especially with regard to the evolution of the streaming industry.
There is a huge sea of fun options, and a single competitor is probably just making a difference at the borders. It is also remarkable that Hastings believes that Disney + will be successful, but does not believe that this will affect his company. After the great revelation, you can see why.
There are so many differences between the two services that they are not really direct competitors. Disney +, for example, is focused on the family. Netflix wants to have something for everyone, and its original content is based on the kind of bigger topics that are likely to become bait for the Oscar and Emmy Awards. Disney has clearly defined verticals for creating content from its existing studios, while Netflix offers content from around the world in a variety of languages, from a wide range of creators, including scripting and un-programmed programming. This also means that Netflix will not compete directly with Disney + for content, as does HBO, Hulu and Amazon.
Additionally, although content quality is greater than Netflix will have a much larger and more diverse library of both services, about two-thirds of Disney + 7500 TV episodes will come directly from Disney Channel. Netflix also plans to spend much more on the original content: Disney pledged $ 2 billion at its original cost by 2024; Netflix, on the other hand, dropped $ 13 billion in content content last year alone, with an increasing portion devoted to the originals.
Are the real wars
Financial journalists (including myself) love the story of competition. Plenty of ink has been spilled into food wars, car wars, and "steep wars." Creating such a story creates a drama and facilitates the reader to understand what is happening.
But in the case of streaming, is it really really a battle in the traditional business sense? These services are often complementary rather than substitute. Many Americans subscribe to multiple streaming services, just as many people pay for Costco membership and Amazon Prime. A survey in 2016 even found that Amazon Prime subscribers are more likely to subscribe to Netflix than non-presidents. There is a big difference between this competition and those that include, for example, Uber and Lyft or Apple and Android in smartphones: . If you want to use riding based on applications in the city, you probably choose Uber or Lyft, not both. Similarly, if you are on the market for a new smartphone, you will probably buy iPhone or Android.
Users can subscribe to both Disney + and Netflix … and many will.
Disney + may actually be good for Netflix
There is one business that Disney + is clearly negative, and this is traditional pay-TV. Subscribe to Disney Channel is one of the main reasons why you paid for cable or satellite TV, it is now much more likely to disconnect the cable.
Despite all talks about cable cutting in recent years, there are still about 91 million subscribers to satellite and cable TV. The decline is slow – Hastings predicts in 2015 that the transition will take at least 20 years – but there are still much more subscribers to satellite and cable services than to Netflix, which ended last year with 58.5 million paid home subscribers. 19659003] While streaming services compete with each other, they also compete with the traditional cable pack; the more users can be convinced to break the cable, the more their entertainment will become available for streaming services like Netflix. In this sense, if Disney + and ESPN + speed up the cable cutting process, Netflix can actually be the winner. Disney offered, but Netflix's head had the right to downplay the threat from the start. In the vast global entertainment universe, both services can thrive.