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In the ten years since the launch of its streaming video platform, Netflix (NASDAQ: NFLX) had the field largely for himself. Several other potential competitors, including Hulu, Prime Video's Amazon (NASDAQ: AMZN)and others have tried to seize its digital hold. But Netflix's relentless focus on spending to expand its library has so far devastated all visitors.
That could change everything when multimedia behemoth Disney (NYSE: DIS) enter the ring. The company recently announced its Disney + direct-to-consumer service, which is scheduled to be launched on November 12 for $ 6.99 per month. With a wealth of intellectual property dating back decades and new blockbusters coming to theaters every year, the House of the Mouse is perhaps the rival that can finally give Netflix the courage to run.
There has long been talk of a company that would overthrow Netflix as the king of streaming, but so far such attempts have failed. A poll just released, however, suggests that Netflix has reason to worry.
Source of the image: Getty Images.
A killer of Netflix?
According to a study conducted by the website Streaming Observer, in partnership with Mindnet Analytics data analytics firm, 14.5% of Netflix's 60 million US subscribers plan to cancel this service in order to sign up for Disney +. It would be a huge 8.7 million customers!
The study, which was conducted earlier this month, found that 12.3% of current subscribers said that they "could cancel Netflix and get Disney +," while 2.2% stated that they would "permanently cancel Netflix" as soon as Disney + was available.
This could be expensive for Netflix. With its most popular package currently at $ 12.99 a month, losing 14.5% of its US subscriber base could cost the company more than $ 113 million a month, or $ 1.36 billion a year .
The study found that over 37% of Netflix's current customers said they'd try Disney + during its debut. Another key finding is that parents are twice as likely as non-parents to consider canceling Netflix for Disney +. That makes sense, given Disney's huge family-friendly library – which includes movies and TV shows from Disney, Pixar, Marvel and Star wars universe, as well as Fox and National Geographic. Netflix, on the other hand, has something to offer everyone, including programs that are clearly intended for adults.
Disney expects between 60 and 90 million subscribers to its streaming service in the next five years, and these subscribers will have to come from somewhere. It's easy to assume that some of them can come to Netflix's expense, but that may not be the case.
Source of the image: Disney.
A little perspective is in order
It is important to highlight some limitations regarding the Streaming Observer survey. First, the study collected data from only 602 current Netflix subscribers, which is a small number for a survey of this type (the survey methodology indicated that it had a margin of error of +/- 4%). The larger the sample size, the more reliable the results.
Another important consideration, which has been noted in the results, is that the mere fact that people say that they will cancel their contract does not mean that they will actually do it. "Of course, the reality is that many people who threaten to cancel will not give up," said Chris Brantner of Streaming Observer.
Not that easy
Several recent studies, including Deloitte's 2019 media trends survey, found that the average American household is now subscribed to Three video streaming services. The services of all subscribers could be on the block in order to make room for Disney + – not just Netflix.
This is not a zero sum game. There will be room for several successful competitors, and Netflix does not necessarily have to be the only winner – just one of them.
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