Huge Disney+ Subscriber Numbers Have Yet to Harm Netflix Stock

The entertainment industry has been gearing up for the 2020 Streaming Wars. Major studios and entertainment conglomerates are snatching up their past content and making ambitious new original content, in effort to offer viewers a robust alternative to both cable and Netflix, the godfather and king of streaming services. The first big salvo against Netflix's market share was shot by Disney and its Disney+ streaming service, which has already amassed more than 28 million subscribers. However, as a new report details, Netflix's profits are apparently not threatened by what Disney+ and other streaming services are doing.

Deadline reports that Netflix's stock has not taken the hit that many might expect after the launch of Disney+. In fact, the general analysis of the streaming service market right now is revealing that first-come established brands like Netflix may in fact be much harder to dethrone than initially thought. Ironically, when the report was written, Netflix stock shares were only down 0.37%, while Disney was down 3.8%.

One analyst at Raymond James financial services, Justin Patterson, provides theory that big services like Disney+ and Netflix will flourish in their co-existence, but smaller services (or "skinny bundles" of content streamers) will struggle in the evolving market:

"While there can be noise in metrics in the short run, we prefer to take a page from Frozen and 'Let It Go.' The success of Disney+ is partially attributable to Netflix' role as a pioneer, which helped drive video hardware and software innovation, encourage media bundling by broadband and wireless providers and shift consumer behavior away from linear," Patterson said. "New disclosures from Hulu Live TV and YouTube TV reinforce that skinny bundles are an imperfect solution to linear TV challenges. Consumers want their Netflix … and now their Disney+. We continue to see Netflix and Disney co-existing."

There is a fair amount of common-sense logic to this, when you really step back to think about it. You only have to look to the past and ask questions like "How long did people keep their dial-up modems and/or Ethernet?" or "How long to AOL Instant Messenger stick around?" or (more pointedly) "How long did it take Netflix to build its streaming service?" to realize a simple reality: once consumers make the big, evolutionary, jump to a new form of entertainment technology (like streaming), there many who tend to stick to the first version of that new technology they encounter (AOL, Netflix, etc.). Disney+ can break through because it's Disney, which is now the arguable biggest and most successful content provider on the planet. It's services that HBO Max and NBC's Peacock that need to prove they have the power to grab a share of the marketplace.

Netflix and Disney+ are both available to subscribers. HBO Max and Peacock are expected later this year.