The battle for media streaming champion is heating up with another conflict for Disney and Netflix. The iconic media company recently implemented a blanket ban on Netflix adverts across many of its channels.
Inc notes this clash is “interesting.” Disney, the world’s largest content creator, and Netflix as the world’s largest streaming platform, hadn’t historically exchanged entertainment-world blows. Since Netflix’s inception in 1997, both have stuck to their own forte.
That was until earlier this year, when Disney announced plans for its own Disney+ media streaming service. It already owns a 60% share of Hulu and earned $35 billion from its movies in the last 12 years. But that doesn’t appear enough for Disney. The nearly 100-year-old company has dived head-first into a two-decade-old industry. In doing so, it entered the fight for streaming supremacy currently being waged by Netflix, Amazon and Apple.
The first real feints to come from Disney were its budget $6.99 price plan versus Netflix’s $8.99 for a single device. That’s on top of news that Disney would pull its movies from Netflix into Disney+. There will also be original Marvel and Star Wars productions.
Disney will likely start with less content and build over the next few years. JP Morgan told its clients in March 2019 to expect Disney+ to reach 160 million global subscribers. Netflix currently has 139 million subscribers. Analyst Alexia Quadrani said at the time:
Our confidence in the resilient success of Disney+ comes from the company’s unmatched brand recognition, extensive premium content, and unparalleled ecosystem to market the service.
As reported by 5News and CNN, Disney will ban Netflix advertising on ABC, FX, Freeform and National Geographic. Netflix ads will still be allowed on ESPN. To CNN, Disney said:
Direct-to-consumer business has evolved, with many more entrants looking to advertise in traditional television, and across our portfolio of networks.
Disney added that it has “reevaluated … [its] strategy to reflect the comprehensive business relationships” it has “with many of these companies, as direct-to-consumer is one element.”
Disney’s “direct-to-consumer” business may have fueled overall revenue growth by 33%.
Just a few weeks ago Disney broke its more amicable ties with Apple. CEO Bob Iger resigned from his position on Apple’s board of directors. During the same week, Apple revealed details of its TV Plus service to rival Netflix (and now to rival Disney). With Apple TV Plus pricing coming out as lower than Disney, just $4.99 per month, competition isn’t just limited to Netflix.
Disney+ is set for launch on Nov. 12. It’s already taking pre-orders and stacking out its streaming platform with both well-loved old shows and original content. The company already has footprints in this space, given its ownership stake in Hulu, which has 28 million subscribers.
Just last month, it was reported that Netflix lost 130,000 U.S. customers in the second quarter of 2019. It also fell short of its 5 million new subscriber target by a whopping 2.3 million. The pressure is on for Netflix to continue to produce new content. But, the streaming company has mounting debt after spending $12 billion on new content. There are a good few reasons why Netflix may be resilient and win out yet though. Not least is the fact it is quickly expanding its content library.
Netflix has 139 million subscribers; Disney might surpass this figure. But, what about Apple TV Plus, launching days before Disney+?
Apple’s proposition will launch on Nov. 1 and is cheaper. Apple will be giving a free year of Apple TV Plus to all its new iPhone, iPad and Mac customers. ZDNet did the math estimating that Apple is selling around 160 million devices per year. Theoretically Apple TV Plus could have itself 160 million Apple TV Plus streamers just off the back of this. Of course, that won’t make these free customers subscribers or users. However, it could certainly help Apple gain fast adoption for its service.
Let’s also not forget that sitting more quietly behind Netflix in the market is Amazon with around 96.5 million viewers estimated for 2019.
It’s not just about subscriber exposure, branding, and price. Content is key in the streaming war set to ramp-up between Netflix, Disney, Amazon and Apple in November. And content could be Apple TV’s weakness despite a $6 billion investment plan.