Many have been predicting the demise of Netflix as Disney prepare to launch their highly anticipated streaming service “Disney Plus”.
It was originally though that the two would go head to head pitching show vs show or film vs film, but recent Disney announcements show this will not be the case.
Disney have decided to show their cards by announcing a bundle deal that is a direct attack on Netflix.
This bundle has a very familiar price of $12.99 and will include Disney Plus, Hulu and ESPN. Conveniently $12.99 is the price of the most popular Netflix option which has many claiming that Disney have Netflix in their crosshairs.
Industry experts are concerned Netflix will not be able to compete with Disney Plus as a standalone product on the entertainment front, add sports and broadcasting to the offering for the same price and Netflix have a huge hurdle to overcome.
Fortunately for Disney their entertainment studios are holding the fort as they look set to have the best box office year in history.
Thanks to movies; Avengers Endgame, Captain Marvel, Aladdin, Toy Story 4 and Lion King, Disney are on the verge of a ground-breaking year that will re-arrange the history books.
It is no secret that TV viewership is declining, with Disney not being immune to this. The disruption is being dubbed “Cord cutting” as Forbes report; “Last year half of all Americans aged 22 to 45 watched zero hours of cable TV”. This single fact is the biggest reason for Netflix’s potential downfall.
With Disney experiencing success in their film department and constant monopoly of theme parks, having the blemish of poor TV viewing figures will not sit well. They have almost been forced to enter the streaming space triggering a “high priority” march to become the global leader replacing Netflix.
The assembling of a $12.99 bundle package for Disney Plus is clear indication of their intentions to move into a space that is going through industry disruption due to the viewing preferences of a younger generation.
Netflix were the first to recognise this change and may be, along with YouTube the main catalysts. However, Netflix may soon become the caterpillar to the pending butterfly that is Disney Plus.
As expected, Netflix are not lying down and allowing Disney to effortlessly take control of the streaming industry.
Netflix have invested $520m to make three big budget films to counter-act the challenge. These include Martin Scorsese’s “The Irishman”, “6 Underground” a Michael Bay film and “Red Notice” staring Dwayne Johnson, Gal Gadot and Ryan Reynolds.
The Irishman will be the most expensive adult drama in recent history, costing $200m. Following on from this, industry experts forecast Netflix will spend $15 billion on programming this year as they attempt to bolster their film library which accounts for one-third of its total viewership.
The huge investment from Netflix feels very much like an all-or-bust effort to remain on top. This raises the inevitable question; will it pay off?
Netflix’s stock price has rocketed 8,300% since 2009, dwarfing even the growth of Amazon.
Despite this, in May, Forbes wrote an article titled; “Netflix has 175 days left to pull off a miracle…or it’s all over”.
In 2018 Netflix invested $12 billion creating new content, in 2019 they toiled to gather further investment for what is expected to reach $15 billion by years end for the same purpose. Most would agree this strategy is not sustainable.
The argument for Netflix is coming from those who claim that “unique content” will be their saviour.
With Disney having invested $120 million ($15 million) per episode on their Star Wars spin-off “The Mandalorian” it is hard to argue for even the biggest Netflix fan that they can continue to compete with such sustained spending like Disney can.
If they do manage to achieve this, they are still facing the gargantuan task of creating better content than Disney in order to persuade the public that they are the superior subscription service.
When all the dust settles, the future of Netflix may depend on a single decision from consumers, are they willing to pay for both?
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