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There are many players in the streaming services market but the reigning leaders in this space right now are Disney (NYSE: DIS ) and Netflix (NASDAQ: NFLX ). Although Netflix is a pioneer in the streaming arena, Disney has become a strong opponent in the past few years, even surpassing its competitors in the number of subscribers in a short period of time. Even as Netflix continues to push forward with its growth investments, Disney still has a meaningful advantage.
Contents – The King
As mentioned many times, content will be a significant advantage for Disney. Content from Disney’s popular franchises provides many opportunities to create new movies and series based on many characters. Franchises like Marvel and Star Wars have attracted and retain a large fan base that continues to enjoy the new content that Disney releases from time to time.
Thor: Love and Thunder, Disney’s latest movie based on the Thor character, marks the first time a fourth movie has been released based on a single Marvel character. This is an indication of the longevity of Disney characters and the potential for more stories based on these characters in the long run. Another example is Black Panther: Wakanda Forever. In 2023, Disney has three more Marvel movies coming – Ant-Man and the Wasp: Quantumania, Guardians of the Galaxy Volume 3and The Marvels.
In addition, series like Ms. Marvel and She-Hulk: Lawyer at Law helping to drive customer growth and engagement during the fourth quarter of 2022. In addition, the series Andorrawhich is based on the character of Rogue One movie, is an example of how the content can be extended from the big screen to the streaming platform.
Disney also releases sequels to many popular old movies under its umbrella in the form of movies and series. Some examples of this are Hocus Pocus 2, Disenchanted, Avatar: The Way of Waterand Willow. This presents another opportunity for companies in terms of content creation.
Meanwhile, Netflix has invested in original content and this strategy has paid off handsomely, with the company finding success with titles like Squid Game, Stranger Things, and The Sandman. The original movie is like that Gray man and Purple Heart has also done well. In addition, Netflix produces regional content for international markets which is expected to increase growth. However, while Netflix titles have their own fan bases, they don’t match Disney’s content footprint.
customer growth
Disney continues to outpace Netflix in terms of subscribers. At the end of the fourth quarter of 2022, Disney had a total of more than 235 million subscribers in its direct-to-consumer service while Netflix reported a total of 223 million subscribers for the third quarter of 2022.
In Q4, Disney + added more than 12 million global subscribers, of which more than 9 million were in Disney + core and less than 3 million were in Disney + Hotstar. Hulu and ESPN+ added approx. 1 million and 1.5 million subscribers per quarter. After losing subscribers in the first two quarters of 2022, Netflix bounced back in Q3 with a net addition of 2.41 million subscribers.
Outlook
Disney expects ESPN+ and Hulu to continue adding new subscribers in the first quarter of 2023, but only expects an increase in Disney+’s core subscribers. Disney+ core subscriber growth is expected to pick up in the second quarter of 2023, mostly driven by international markets. For the fourth quarter of 2022, Netflix expects net paid additions of 4.50 million and paying members to reach 227.59 million.
Click here to read the full transcript of Disney’s Q4 2022 earnings conference call
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