The Streaming War: The real reason why Disney+ will have a tremendous advantage

It is no secret that streaming services are dominating the entertainment market. The universal movement to be able to watch anything, anywhere, at anytime, on any device opened up this highly profitable yet wildly competitive market that one of the worlds biggest companies is about to take by storm.

The long-anticipated Disney+ streaming service is set to hit the market in a little over a month, on November 12th, 2019. How will they compete against the novelty success of Netflix, you might ask? Well, first of all, it’s Disney. Second of all, Disney will no longer rent their content to other streaming services but harbor a service of their own with all of their original content. You might be thinking to yourself, “well, I’ve been watching a little too much Lilo & Stitch anyway. And I can live without Beauty and the Beast.” The traditional Walt Disney content that comes to mind merely scratches the surface of Disney’s extensive back catalog, which is precisely the thing that will give Disney+ an extreme advantage.

We all know Disney’s massive success in the film and television industry, but many do not know the extent of content they technically own. Aside from their own original content, Disney’s film properties include Pixar, Marvel Studios, Lucasfilm, 20th Century Fox, Fox Searchlight Pictures, and Blue Sky Studios. What this means to the average individual that Finding Nemo (Pixar), Iron Man (Marvel Studios), Star Wars (Lucasfilm), Home Alone (20th Century Fox), Napoleon Dynamite (Fox Searchlight Pictures), and so many more favorites will be off limits to any non-Disney+-subscribers. According to Mark Mahaney of RBC Capital Markets, Disney plans to spend around $1 billion on original content surrounding their existing brands, while Netflix will be spending 7-8x that much. Netflix’s content budget stands around the $15 billion range. Half of this goes toward original content while the other half goes toward their rented content. Netflix’s absence of a back catelog like Disney’s puts a pressure on them to produce more original content in order to establish some security. Simply harboring rented content runs the risk of partners breaking the relationship with Netflix, which would leave Netflix with nothing. Disney, on the other hand, has ultimate security with their extensive back catelog.

With all that being said, the final verdict is that there seems to be room for both Disney+ and existing streaming services such as Netflix to coexist successfully. According to a survey conducted by RBC Capital Markets, the vast majority of viewers are willing to sign up for more than one service, with 70% willing to subscribe to two or more services. I, myself, am subscribed to Netflix, Hulu, and HBOGo (okay, lets be real. I mooch off of my mom’s Netflix and my friends HBOGo. But I totally would subscribe to all three!). Each streaming service has their own “special sauce”, or varied array of content that is central to that particular service. This draws customers to subscribe to more than one service in order to watch all of their favorite TV shows and movies, leaving room for both Disney and Netflix to revel in tremendous success as streaming services.

https://www.cnbc.com/2019/04/12/disney-has-a-major-advantage-in-the-streaming-war-rbc-capital.html

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