Analysts Suggest Disney+ Has Yet to Have Impact on Netflix Subscriptions
took a sturdy hit in the market the day after, but has since rebounded. At the end of business [...]
Disney+ has been out for the better part of two weeks and according to industry analysts, the new streaming service has yet to have a major impact on active Netflix subscriptions. In a new report from Business Insider, two separate Wall Street analysts have penned letters to clients suggesting not to jump ship from buying Netflix stock just quite yet. Leading the way is Piper Jaffray analyst Michael Olson, who suggests he hasn't seen an increase in the people who plan on canceling Netflix is favor of Disney+. Olson surveyed 1,700 active Netflix subscribers.
"We have not seen an increase in the percentage of Netflix subscribers who expect to cancel Netflix in favor of Disney+," Olson said. "In other words, most existing Netflix subscribers appear to be trending towards multiple streaming video subscriptions."
Nomura analyst Mark Kelley echoed the sentiment albeit more bearish, saying Netflix numbers are holding strong in the shadow of a massive Disney+ launch earlier this month. "Despite Disney+'s strong launch, Netflix's domestic app download trends remain within historical bounds even with YoY growth deceleration from the prior week," Kelley said is his note to clients. "We think that investors will remain cautious until reported results tell the same story. We remain Neutral on Netflix, given concerns around valuation and capital intensity."
Earliest reports suggested Disney+ ended up having 10 million first-day sign-ups for its service. The new OTT service ended up launching November 12th to the pleasure of Disney watchers everywhere. Netflix ($NFLX) took a sturdy hit in the market the day after, but has since rebounded. At the end of business Friday, the stock was still trading at $310.48 per share, down 0.39 points from yesterday.
Netflix addressed the arrival of Disney+ in a letter shareholders earlier this fall. "The launch of these new services will be noisy," the company said in October. "There may be some modest headwind to our near-term growth, and we have tried to factor that into our guidance. In the long term, though, we expect we'll continue to grow nicely given the strength of our service and the large market opportunity."
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