New Disney Streaming Service Could Put a Large Dent In Netflix Subscriber Base

Netflix has had a good run of record profits and subscriber growth for a long while now. Today they are the dominant player and the most turned to streaming TV service for those who want to cut the cord and watch a large library of commercial-free content for much less than the cost of cable.

Disney Streaming Service a Netflix Killer?

While Netflix has had several competitors like Hulu, Amazon Prime Video, VUDU, and Redbox, they have never yet faced a challenge like they are about to once the new Disney Streaming Service is launched sometime in early 2019.

That's because Disney has a huge cache of exclusive content which includes popular titles from Pixar, Marvel, and Star Wars which will no longer be accessible to Netflix subscribers. This content leaving could be the main reason many choose to dump Netflix in favor of Disney or other streaming services like Amazon Video or Hulu.

To make matters even worse for Netflix, if the rumors are true, Disney reportedly will offer their new Streaming Service at a lower monthly price than what Netflix is currently charging. This will basically kill any plans Netflix may have had to raise prices higher in the short term.

While Disney won't have as large a library of original content that's available on Netflix. They will try and make up for this by offering higher quality titles including a long list of popular new headline grabbing shows Disney plans on releasing next year.

Fortune reported that "Captain Marvel, Dumbo, Toy Story 4, a live-action Lion King remake, Frozen 2, and a new Star Wars movie are all coming to Disney's New Streaming Service"

While initially Disney's 300 Million dollars in revenue it receives from Netflix will cause their streaming service to operate at a loss. This will quickly change should many former Netflix subscribers sign onto Disney's streaming service instead.

Higher Subscriber Churn Could Be The New Norm For Netflix's Future

Subscriber churn is when a customer subscribes to a streaming service for only short while to watch popular content and then dumps it go onto something else. While many subscribers may not completely dump Netflix for Disney. They may dump the streaming giant for several months at a time while they catch up on some of the best shows on Disney. This could have a big impact on their overall revenue as subscribers start jumping around from one streaming service to another.

Many customers stayed with Netflix for years because they did have a long list list of content from a wide range of content producers. Now that much of this content is moving to competitor's platforms, subscribers who wish to continue watching will most likely follow their favorite movies and shows over to their new homes.

Most of us only have a limited amount of time to watch television and rather than continuing to pay for one streaming service we're not using, we will simply cancel one streaming service while we subscribe to another. Netflix and Disney could try to offset this by offering their customers a much better price available to those that subscribe for an entire year at a time rather than charge a fixed price that is the same every month.

Currently Netflix does not do this but this is a method that has worked very well for the porn industry which has successfully implemented this pricing strategy for their Premium Adult Streaming Channels.

Apple May Also Take a Large Slice From Netflix's Pie

Even more concern was the recent news from Apple that they were coming out with a streaming TV platform of their own. To make matters worse for Netflix, Amazon, and Disney, Apple plans on offering their streaming service to those who own Apple TV, iPhone or iPads for FREE. Apple is reportedly working on its own original content for this project. It will launch with a dozen or original shows, some that are SciFy based.

Apple has not yet announce an official launch date or even what they plan on naming their new streaming TV service. Yet once launched it very much could also cause subscribers to dump Netflix. At least initially while those cord cutters who own Apple devices stream and watch TV for free.

Netlfix's on a Spending Spree

Netflix recently announced they will be floating bonds for an additional Two Billion Dollars of debt to produce even more original content for their platform.

Netflix's Stock has continued to do well based on recent earnings and continued subscriber growth which has been lower than expected worldwide. The company recently announced they plan on accruing even more massive debt to produce a lot more original content of their own. This will be helpful now that Hulu and soon Disney will be pulling a large chunk of their movie and TV Show library from Netflix to use for their own streaming services instead. Although Netflix's original content will need to be top quality so it can also compete with the shows that are leaving.

No doubt, Netflix will continue to be a major on-demand content provider and a force to be reckoned with. Going forward though, they will need to be creative and fight for continual subscriber growth and try hard to limit subscriber churn as both Disney and Apple launch streaming services of their own.

Increased competition from Disney, Hulu and Apple streaming TV services could make for some tough times ahead for Netflix, yet it could be an even better time for those that chose to be cord-cutters.

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