Facebook vs. Twitter. Uber vs. Grab—these are just some of the company matchups we’ve been hearing about in the last few years. These corporations battle over sales, performance, customer demands, among other things.
Looking at another top-of-the-line showdown, spectators are bracing themselves as media giants Netflix and Disney face off.
Disney’s Effort to be Number One – The Battle Begins
Because of its unparalleled contribution to the entertainment industry, Disney has the capacity to intimidate other media. Intentions were made clear when Disney announced plans for launching its own streaming service. Currently Netflix has an exclusive licensing deal giving them streaming rights to Disney’s theatrically released films as well as Marvel, Lucasfilm and Pixar subsidiaries—but that deal runs out in 2019, leaving Disney with the power play to provide their content on Disney-owned services only.
Disney has an estimated revenue of $41 billion. In a recent event, Chairman and CEO Robert Iger decided to power through the competition by purchasing 21st Century Fox, for a whopping $66.1 billion, including a $13.7 billion debt. The billion-dollar acquisition made by Disney will not just allow them to have a much larger audience and gain bigger revenue. The strategic purchase also means they inherit Fox’s 30 percent share in Hulu, giving Disney 60% ownership in the steaming service and its 12 million subscribers, and thus opening up a world of possibilities for steaming original content as well as live TV packages.
Does Disney Have an Upper Hand?
More and more consumers are cutting the cord opting out of traditional TV cable packages in favor of emerging live streaming TV offerings like PlayStation Vue, DirecTV Now, YouTubeTV, Hulu, and Sling. In 2017, research firm eMarketer predicted a total of 22.2 million U.S. adults cut the cord on traditional cable, satellite or telco TV services.
Disney’s purchase of Hulu allows them to play the game, but they also have the upper hand when it comes to sports broadcasting. In addition to their popular WatchESPN app, on April 11th, Disney launched their first stand-alone subscription-based sports streaming app called ESPN+. The live TV streaming world is emerging and always evolving, and it is clear that Disney has every intention of being a heavy hitter.
Netflix Giving Disney a Run for its Money
Netflix seems to be unfazed by these major moves made by Disney in the media scene. The California-based company is working well under pressure and has plenty of tricks up its sleeve.
The rags to riches formula in Disney’s classic stories has worked for decades. Coincidentally, the theme pretty much mirrors the experience of Netflix when it started as a self-effacing rental service of DVDs. With the technological prowess of the internet, Netflix began to reach its prime.
Netflix turned its fate into streaming various TV shows and movies. People started watching and yearly subscribers around the world steadily increased. From 23 million subscribers in 2011, the company’s audience grew to 117 million in 2017.
According to David Miller, an analyst at Loop Capital Markets, “While last year’s subscriber growth was notable, we expect to see true operating leverage out of Netflix this year, and we believe the company is poised to deliver that at a level well beyond what we witnessed in 2017.”
The continuous demand for Netflix’s streaming services has allowed the conglomerate to create original content. And because Netflix has a projected annual revenue of $11.7 billion, it can continue producing more original content. The following are examples of the service’s sought-after series Netflix:
- Stranger Things
- 13 Reasons Why
- Black Mirror
- Santa Clarita Diet
- House of Cards
- Altered Carbon
- Orange Is the New Black
The battle between the two media giants is changing the way people feel about entertainment. For one, there are more choices than ever. People just have to choose which shows are better, more convenient to watch, and which ones are worth their money. Is it Disney, a company that has a long, proven experience in providing quality entertainment? Or is it Netflix, a promising newcomer that has been proving the doubters wrong and is currently changing the norm of television experience?
And of course, we can’t forget about Amazon Prime and Apple. Amazon Prime’s membership includes unlimited streaming of movies TV shows including widely-successful original content. And Apple launched its first set of shows and recently made big hiring moves to create more content for their subscription streaming service.
The competition is heating up and this showdown is worth watching.