Netflix Confident Disney+ Won't Be Competition, But Is That True?


Netflix seems fairly nonchalant about the arrival of TV services from Apple and Disney.

Both Apple and Disney have announced their direct-to-consumer solutions within the last few weeks and of the two, Disney and its new Disney+ service arrived in grander fashion and instantly drew references from many as a ‘true Netflix competitor.’

Today Netflix announced its latest quarterly results and in the letter to shareholders took a moment to comment on the latest two additions to the streaming market.


Specifically, Netflix says it does not expect the arrival of either service to “materially affect our growth.”

One of the primary reasons Netflix cites for this is the size of the market overall suggesting there’s plenty of room for all of the competitors to grow without impeding on each other. With Netflix likening the current situation to that of the 80s and 90s when “US cable networks collectively grew for years as viewing shifted from broadcast networks.”

Although this is fair to argue, there’s the issue that in spite of being in the early transitional stage as suggested, many consumers are already starting to feel the effects of ‘subscription fatigue.’


This is where things may prove more complicated.

Direct-to-consumers solutions like Netflix and Disney+ are also now having to compete with the rise in so-called “skinny” live TV bundles that also now require a subscription. Not to mention, these skinny bundles have proved highly controversial of late due to their almost in unison price increases.

The result of these combined factors is an emergence of a trend where consumers are starting to feel the need to choose between subscriptions when previously they may have just paid an all-in-one price for different services.


It is not so much that there's too many services, or even that they necessarily cost more, but that there's too many subscriptions to now manage.

With Netflix and Disney+ being additional services consumers typically use to compliment their live TV experience, they are likely to be directly comparable, and even expendable subscriptions.

What’s more, one of the big ‘reveal’ moments from the recent Disney+ unveiling was the price. With the Disney-backed service arriving to market later in 2019 at just $6.99 per month, and considering the wealth of content it plans to make immediately available, Netflix at almost twice the price might find the effects of the Disney+ launch do reach its shores.


In comparison to the lower-than-expected Disney+ launch price, Netflix recently increased its prices in the U.S. and now charges a minimum of $8.99 per month for the most basic level of access, and $12.99 per month for what many (including Netflix) would consider to be the standard plan.

Netflix does have the advantage of already being a global player in this market and those international sub-markets are ripe for Netflix to massively expand its growth in the years to come.

However, again Disney has made it clear that it plans to expand aggressively and expects to have effectively completed its Disney+ global rollout within two years.


In the more long-term, the market might indeed prove wide and varied enough to account for all of these different services, and right now Netflix does have plenty of strength in content as well as enough of a user-base buffer to easily ride out a short-term Disney+ bubble. But that does not mean it will be completely smooth sailing for Netflix.

Speaking of users, as part of the same announcement today Netflix confirmed it added 9.6 million members in the last quarter – this breaks down to include 1.74 million in the US and 7.86 million elsewhere.

Netflix also stated its "global paid streaming memberships” now stands at 148.9 million.


A number Netflix expects to rise to 153.9 million by the end of the second quarter of 2019.