Disney vs Netflix for Streaming?
Does Disney's new streaming service pose serious threat to Netflix?
21:20 23 November 2018
Last year, Disney notified Netflix about the end of their distribution agreement as it prepares to launch its very own streaming service in 2019. Although Netflix’s shares dropped immediately after Disney’s announcement, it easily bounced back, which showed strong investor confidence despite looming tighter competition.
Netflix has and is still the market leader in the streaming industry despite competition from tech giants and traditional media companies. But can Disney, which boasts decades of material and deep pockets, change that in the next decade?
Disney’s many children’s movies are already considered must-haves in many households around the world. With its purchase of 21st Century Fox’s entertainment business, it is set to cement its ownership of other beloved franchises, from Star Wars to the Simpsons.
The company is also in a strong financial position due to its diverse business, which include cruise lines, theme parks and sizeable traditional television units.
Paul Verna, principal analyst at eMarketer, said: "Netflix is definitely the most one dimensional of all these companies in the sense that they live and die by their subscription revenue,"
"The other companies - they have very deep pockets and a lot more sources of funding to pull from. In a way that puts Netflix at a disadvantage."