Will Success Of Disney+ Hammer Amazon And Netflix?

By Douglas A. McIntyre Published Apr 12, 7:51AM EDT

Follow 24/7 Wall St. on Google

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

Will Success Of Disney+ Hammer Amazon And Netflix? — © Disney Studios

Disney+, the streaming service of The Walt Disney Company (NYSE), reached the 50 million subscriber level last week. Disney had predicted it would not hit that level until 2023. What experts cannot say is whether the rapid rise will harm larger rivals Amazon.com Inc (NASDAQ: AMZN) and Netflix, Inc. (NASDAQ: NFLX). It will not be evident until those two companies report earnings. To compound any forecast of a competitive landscape, it is too early to tell how many of the Disney subscribers will stay with the service.

Most theories about the relative success of streaming services are based on how many of them people will pay for at once. At some point, consumers have more programs than they can watch. Some research puts the median number of streaming services per household at about three.

And, there is the issue of expense. Disney+ carries a subscription price of $6.99 a month. Netflix’s Standard plan is $12.99 a month. Amazon’s is $12.99 a month. However, it is part of Amazon’s Prime subscription, which includes exclusive deals on Amazon products and free shipping, among other benefits. To subscribe to all three carries a price of close to $33 a month.

Netflix has over 155 million subscribers worldwide. Amazon does not release a figure, but it is estimated to be above 100 million. There are several smaller services, which include Hulu, CBS All Access, and HBO Now.

Netflix and Amazon produce vast amounts of original content to draw and keep subscribers. Each invests well into the hundreds of millions of dollars a year. Neither company releases hard numbers of whether this works as a way to cut “churn,” which is how many people drop out of the service in any given quarter.

Disney+has an appeal which is not based as much on original content. Its foundation is a massive library of highly popular programs. Disney owns Disney movies, Pixar, Marvel, and Star Wars. Some of its films are among the most popular of all time based on box office success. The Star Wars and Avengers films have brought in billions of dollars from traditional theater tickets.

As the pandemic keeps people indoors, it may be they will pay for more services than they have in the past. As people begin to leave their homes again, they may start to cancel. And, no one knows which services will be abandoned.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.