This article has been updated with information from Netflix.
Streaming service giant Netflix may run into massive problems once its next competitor, Disney+, launches in November.
That’s what personal investor Stephen McBride is warning over at Forbes. McBride, who is also the chief analyst at RiskHedge and publishes a weekly report on stocks he believes will disrupt the market, called Disney “The Undisputed King of Content,” noting the media giant plans to offer a cheaper streaming service with guaranteed great content.
“It’s going to charge $6.99/month—around $6 cheaper than Netflix. And it’s pulling all its content off of Netflix,” McBride wrote. “This is a big deal.”
Netflix, he wrote “is not the future of TV,” even though it is the current king of the streaming services. While it has disrupted the distribution process for cable companies and spent billions of dollars developing original content, the streaming service is racking up billions of dollars of debt, according to McBride. “It currently owes creditors $10.4 billion, which is 59% more than it owed this time last year,” he wrote.
But with Disney set to take even an even bigger slice of media (with its streaming service), Netflix may not be able to compete. Disney, McBride reminded us, has been around since 1928, had more than 160 million people visit its theme parks in 2018, owns ESPN and ABC News, Marvel, Pixar Animations, Star Wars, and more. “In six of the past seven years, Disney has produced the world’s top-selling movie,” McBride wrote. In 2018, four of the five highest-earning films were made by Disney.
If the megacorporation pulls all its popular content from Netflix and puts it on its own streaming service, it could really hurt Netflix.
“While Netflix is running into debt ‘trying out’ new shows, Disney already has the best of the best in its arsenal,” McBride wrote.
McBride provided a scenario that could potentially devastate Netflix (though there’s no evidence thus far Disney actually plans to do this):
Picture this…
Disney puts a blockbuster like Avengers Endgame on its platform the same day it opens in theaters.
After a few weeks it’s no longer in theaters. You can’t buy it. You can’t rent it. The only way to watch is to subscribe to Disney’s steaming service, Disney+.
For example, the only place your children or grandchildren will be able to see Toy Story 4 and Frozen 2 may be on Disney+.
Can you imagine how many parents will sign up for this? I’ll certainly be subscribing for my daughter.
At $6.99/month, what family with kids under 12 years wouldn’t subscribe?
Of course, McBride’s warning does contain several “ifs.” He’s assuming people would drop Netflix for Disney+. Some may do so, but a study from March of this year found that the average American subscribes to 3.4 services — and that 70% of U.S. households have at least one subscription. Netflix offers so much more than Disney content, and since Disney+ will cost only $6.99 to start, people might simply add it to their list of streaming services.
A Netflix spokesperson did not provide The Daily Wire with a comment, but did direct the author to a recent survey finding 40% of respondents said the streaming service had the “best original programming.” The spokesperson also provided the company’s past two letters to investors, which state the streaming services is not worried about Disney+ or any other competitor.
“Our focus is not on Disney+, Amazon or others, but on how we can improve our experience for our members,” one of the reports said.
