Netflix forecasts weak second-quarter subscriber additions as streaming competition looms

Lewis Collier
April 17, 2019

Netflix predicted it would pick up 5 million new streaming subscribers from April through June.

The company said that after launching in the USA on November 12 at $6.99 per month, Disney+ will gradually expand internationally, starting in Europe.

Disney+ will be packed with blockbuster movies and TV shows from the Disney library, including its recently acquired assets from 21st Century Fox.

The US tech giant, which is behind shows such as The Crown said it added 1.74m paid subscribers in its home market and 7.86m worldwide - outstripping both its own and Wall Street's estimates.

New shows already on tap include "The Mandalorian", the first live action "Star Wars" series, created by Jon Favreau; a prequel to the "Star Wars" film "Rogue One", starring Diego Luna; a series about the Marvel character Loki, starring Tom Hiddleston; a rebooted "High School Musical" series; and a new documentary series focused on Disney.

"We don't anticipate that these new entrants will materially affect our growth", Netflix said, "because the transition from linear to on-demand entertainment is so massive and because of the different nature of our content offerings."Disney is leading a shift among traditional media companies that had been selling programming to Netflix for years".

Disney plans to make the streaming service available in all major regions of the world within two years. Hulu, which is controlled by Disney, Comcast, and AT&T, had 25 million United States subscribers in 2018.

Disney ($DIS) could "certainly have an impact on Netflix's growth over ... a short term period", Hargreaves said.

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Disney hasn't fully confirmed the devices that will support the service, but an image of the Switch console appeared in an official slide during a presentation.

Many analysts believe that consumers will pay for both Netflix and Disney+, whose total price will not much exceed $20 per month.

"Captain Marvel" will be available at launch.

Eric Haggstrom, forecasting analyst at eMarketer, said the revenues generated by the price increases will help Netflix differentiate itself in an increasingly crowded industry.

Hargreaves added that the new competition does pose a particular long-term threat to Netflix. The company's chief product officer, Greg Peters, said Netflix will look into finding a lower price tier to "broaden accessibility" in India.

Martin said that in polling, U.S. customers say they plan to use only two or three streaming services and that as a result, any growth in Disney+ will significantly weaken Netflix. The Winter Soldier actor Sebastian Stan took to Instagram to show off the new logo for his upcoming Disney+ show Falcon and Winter Soldier.

"We believe Netflix can not win" such a war because of Disney's cost advantage from owning a vast amount of content.

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