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Netflix (NASDAQ: NFLX) notes that its competition is growing, but it does not fully admit – at least for investors – how much Disney & (NYSE: DIS) Competing platform will be when it will launch in 2019.
The comments I'm talking about came during Netflix's second quarter revenue call July 16, after the company reported a lack on subscribers for the first time in two years. The bad performance comes less than a year before Disney launches its own subscription service.
Netflix will not only lose Disney content currently available, but it will also prevent its users from switching to Disney's service subscription, Bob Iger, Disney's CEO, stands next to Minnie Mouse to celebrate his entry to the Hollywood Walk of Fame "src =" https://g.foolcdn.com/editorial/images/488523/disney-copy-3_large.png "/>
Bob Iger, CEO of Disney, will participate in the next video of the company. Platform. Source: Disney
Netflix Releases Disney Content Loss
When Disney announced its imminent departure a year ago, Netflix's CEO, Reed Hastings, first declared that it was not concerned about the loss. He suggested that Netflix's international growth would more than compensate disaffected Disney users who were leaving.
Hastings maintained a similar point of view in the last income tax appeal. When asked how much of Netflix's current content is licensed, particularly from Disney or (NASDAQ: FOX) (NASDAQ: FOXA) he declined to answer. However, he said the percentage was down, as Netflix was expecting several of its competitors to want to retrieve their content to create their own video streaming services. He said the company has been waiting for this trend for a while, which is why it started investing in original content years ago.
Currently, Netflix relies on Disney and Fox for some of its original content library. Disney creates a Marvel series for Netflix, while Fox provides the series Nurse Ratched . Hastings said the company has been pleased with the performance of these two original shows so far, and that users can look forward to Fox's original titles.
While losing Disney content in 2019 will be a real blow, Netflix Disney Films made in 2016, 2017 and 2018 for a good time. However, it will always be difficult for Netflix to compete with the Disney brand platform, which will be full of strong brand content like Pixar, Marvel Studios, Lucasfilm and Walt Disney Studios.
Why Netflix should take Disney? earnestly advance
On the earnings call, Hastings said Netflix's strategy for rivaling Disney is to continue doing what it does: produce content, invest in marketing and s & # 39; Ensure that its interface is up to date. This is a casual vision of the competitive landscape, given the type of platform that Disney could launch next year.
On March 14, Disney completely reorganized its business to create a new direct sales division to consumers. This new internal structure proves that Disney is going all out on its video platform. Disney has also recently hired Kevin Swint, who has already contributed to content initiatives at once Apple and Samsung .
Disney's streaming service should be family-friendly, with a special emphasis on content for kids. This could help it stand out from Netflix, which does not yet have a site for parents who just want movies and children's shows.
In addition, now that Disney has won the Twenty-First Century Fox auction war, he could use Fox's shows to attract adult viewers to a separate platform or a separate section of the same platform . Fox's successful shows include Modern Family and This Is Us .
Finally, although Netflix is still learning the ins and outs of the cinematic space, Disney has already established itself as the king of blockbusters – its Marvel brand alone has released 18 films that have together generated more than $ 14 billion at the box office. And in 2018, Marvel's Avengers: Infinite War generated an impressive $ 2 billion in ticket sales worldwide, while Black Panther generated about 1 , $ 4 billion worldwide.
Disney said own streaming destination will not have a volume of content as high as Netflix. However, the quality of its beloved brand content like Pixar and Marvel should quickly attract a number of loyal fans when it launches sometime in 2019. If Netflix wants to prevent Disney from seriously reducing its base from subscribers, need to begin to fully recognize the power of Disney to attract bored Netflix users to its new fancy site next year.
