Disney+ wins a battle between streaming platforms (but not the war)

  • Disney+ added 7.9 million subscribers and has 137.7 million total globally from its video-on-demand platform.
  • Netflix, on the other hand, had lost 200 thousand in the same period (first calendar quarter of 2022) and expects a bigger drop at the end of the year.
  • Should you invest in Disney? On Netflix? In Paramount+?

Disney Plus (Disney+) bettered previous analyst forecasts and posted an increase in subscribers of almost 8 million. The data was part of the financial results for the second fiscal quarter of 2022 of the global entertainment company.

One figure stands out from the rest in the Disney report: 137.75 million more subscribers globally for its video-on-demand platform.

The comparison is very simple and immediate: Netflix lost 200 thousand subscribers in the same period of time and has already warned that it will lose another 1.5 million in the second half of the first semester.

Thus, while one company advances without brake in search of leadership in the streaming segment, the other, the first, Netflix, already mature, sees how its marketing strategies do not work.

Disney finances. DisneyPress.

Invest in Disney stocks

Despite the more than interesting figures, Disney says that the number of new subscribers may slow down in the coming quarters.

Christine McCarthy, Chief Financial Officer of the US company, said in a note to shareholders and communicators that the first half of 2022 was better than they had expected.

The entertainment holding explained that the average income per Disney Plus subscriber went from 5.15 to 6.30 from an increase in price.

This value also includes Star+ subscribers in Latin America.

Relevant information is the loss of one billion dollars that had to be paid for early termination of some content license agreements.

Although the firm did not give a specific detail of how much it lost for each finalized agreement, it is understood that the biggest loss came from the contract that ended with its rival Netflix to be able to take the original Marvel series and other specific content.

The Complete Disney Report.

Disney Plus celebrates and Netflix expects to lose more subscribers

At the same time that the heads of Disney streaming celebrate the advance in the number of subscribers, on Netflix the faces are different.

As we explained before, the firm resigned subscribers for the first time in more than 10 years and all the alarm lights went on.

One of the reasons is that the pandemic is over and the rage over the series has lost strength as people have left their homes.

Netflix, the leader in this segment, was the hardest hit.

The most serious thing is that the company believes that the drop in users could be up to 2 million by the end of 2022. A real disaster.

But not only the end of the coronavirus has hit Netflix, the competition is fierce in the streaming market. To platforms like Amazon Prime Video and AppleTV +, the giant Disney was added and the same cake now has to be divided among many more rivals.

On the other hand, analysts understand that some premiere strategies in a “marathon” format (all the chapters together) failed. This causes people to talk about the topic at once and then get lost.

Disney, on the other hand, releases chapters per week and this keeps the conversation going in the media and on the networks for much longer.

This, in the long run, converts interest into new subscribers.

Content is the key to streaming Disney

In order to fight against the evident drop in business, both Netflix and Disney + plan to launch cheaper subscriptions and include ads.

Netflix has already told its developers that it will implement this strategy before the end of this year.

With this unprecedented modality for the platform, the company that continues to be the leader in the streaming market intends to reduce subscription losses and generate a control system that avoids sharing passwords.

Disney, for its part, understands that the combination of cheap subscriptions with advertising, together with the traditional model, would be the perfect formula to increase its users.

According to Bob Chapek, chief executive of Disney, “this strategy will allow the firm the ability to make price adjustments while maintaining the number of subscribers.”

The key to Disney streaming is in a weapon that is not at all secret: the content.

According to Chapek, the catalog is the key that will make Disney increase subscribers exponentially in the next decade and drive profitability.

Disney streaming has an advantage

Disney+ has an advantage if this is the path that all streaming platforms must face.

The home where Mickey Mouse was born knows the popularity of its titles. Without naming them all, he’s eyeing releases like the Obi-Wan Kenobi series, Ms. Marvel, She-Hulk, and the Blade reboot.

In parallel, Netflix expects to release new seasons of Stranger-Things, Cobra-Kai, The Umbrella Academy and the long-awaited return of Love, Death & Robots.

netflix stock
Netflix expects to release new seasons of Stranger-Things, Cobra-Kai, The Umbrella Academy, and the long-awaited return of Love, Death & Robots.

While Disney+ is expected to spend a hefty sum to win the battle of the streaming video platforms, other big players have their own strategies planned as well.

In the “war” are several big players such as HBO-Max, Amazon Prime, Paramount Plus and AppleTV +. Neither is a minor player in this congested and profitable market.

With these data, a good conclusion is that the shares of companies linked to streaming services have a lot to give.

The problem is to identify who will win and invest now.

Analysts believe that Disney is the best positioned, but its business spectrum is so broad that the stock may lose on the other side (although it could also win).

Netflix’s actions, meanwhile, depend exclusively on the actions they carry out in terms of streaming. He has no other business.

Paramount + is an interesting possibility from a recent landing in the sector, a large catalog and a lot to grow.

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