by Ray Keating
Analysis
DisneyBizJournal.com
January 26, 2022
When zeroing in on the battle between Netflix and Disney, the more traditional take is that Netflix has a big advantage given its number of subscribers.
After all, Netflix has 222 million subscribers versus Disney +’s 118.1 million. Although one cannot ignore that Disney also has 17.1 million ESPN+ subscribers along with 43.8 million Hulu subscribers. That tallies up to a total of 179 million subscriptions. Hmmm.
But what if we just stick with Netflix vs. Disney+? A very interesting article at TheStreet.com caught my attention. Written by Daniel Kline, the article was titled “Netflix's Problem Isn't Membership. It's What Disney Has That It Doesn’t.” Well, what was Kline’s take with this provocative title?
While he starts out noting the market’s disappointment with the recent slowdown in Netflix’s subscriber growth, Kline correctly pointed out that when you’ve hit 222 million, some slowdown in growth should be expected. Instead, Kline asserts that Netflix’s real problem is about “content and spending.”
Kline argues that Netflix “basically throws shows at the wall to see what sticks.” That is, “Netflix has been releasing roughly 100 to 125 new shows, movies, and comedy specials each quarter. How many of those actually become hits -- maybe one or two each quarter? … Not owning high-interest IP forces Netflix to make a lot of shows and movies in hopes of having a hit.” He notes that Netflix is planning to spend $17 billion in 2022 on content.
Now, compare that to Disney+. Kline points to Disney’s vast IP library, including Star Wars, Marvel, Pixar, its own well-known characters, along with “Indiana Jones and a variety of other properties that it hasn't even bothered to use on its streaming service.” Yet.
Kline drives home his argument this way: “Essentially, the third or fourth most-popular ‘Star Wars’ show based on minor characters from that universe garners more interest than all but the top-tier Netflix content. That gives Disney a huge advantage as every show it puts on its streaming service essentially becomes a hit. Not all hits are at the same level – ‘The Mandalorian’ likely brings in more viewers than ‘The Mighty Ducks.’ But each swing the Mouse House takes has a solid chance to be a hit.”
It’s hard to argue with Kline’s take. While companies mismanage their assets on a regular basis (see Disney itself after Walt’s death until the arrival of Eisner, for example) and are punished in the marketplace accordingly, if Disney can work its creative magic with these vast assets, then the more typical analysis not too far down the road might be along the lines of how Netflix can rebound after being overtaken by Disney+.
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Ray Keating is the editor, publisher and economist for DisneyBizJournal.com, and author of the Pastor Stephen Grant novels and assorted nonfiction books. Have Ray Keating speak your group, business, school, church, or organization. Email him at raykeating@keatingreports.com.
The views expressed here are his own – after all, no one else should be held responsible for this stuff, right?
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Keating has three new books out. Vatican Shadows: A Pastor Stephen Grant Novel is the 13th thriller/mystery in the Pastor Stephen Grant series. Get the paperback or Kindle edition at Amazon, or signed books at www.raykeatingonline.com. Past Lives: A Pastor Stephen Grant Short Story is the 14th book in the series. Again, get the paperback or Kindle edition at Amazon, or signed book at www.raykeatingonline.com. And order the 15th book in the series What’s Lost? A Pastor Stephen Grant Short Story – grab it at Amazon.com or signed editions at www.raykeatingonline.com.
Also, check out Ray’s podcasts – the Daily Dose of Disney, Free Enterprise in Three Minutes, and the PRESS CLUB C Podcast.
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