Netflix was once the only game in town when it came to streaming your favorite TV and movies online. But in the years since the company began its transition from a now officially defunct DVD-by-mail service, to an online streamer, every other studio has launched its own competitor trying to get a piece of the pie. Netflix is still the king in the world of streaming but a major Wall Street firm says there is one, and only one, competitor that might be capable of taking that crown: Disney+.
Sanford C. Bernstein recently released coverage on several different major media stocks (via THR) and in its coverage of Disney+ it called the platform the “only credible challenger to Netflix.” Bernstein thinks that once the expected merger between Disney+ and Hulu happens, the growth of the streaming platform will outpace the decline that Disney is seeing in its linear network business, a decline that spawned rumors of Disney possibly selling ABC and other traditional broadcast/cable outlets.
Disney+ was an overnight sensation when it launched in 2019, the number of subscribers initially outpaced even Disney’s most optimistic expectations. When you include Hulu’s numbers, which Disney owns ⅔ of, Disney has a major footprint in the streaming game already, but even if you add Disney+ and Hulu’s global subscriber numbers together (and many people likely already have both), they still come up short of where Netflix is today.
But subscriber numbers don’t automatically equal profit. Streaming platforms have been seen as the future by all the major studios, but the investment to make them happen results in them being guaranteed money losers for the first several years of their existence. While the losses are expected to drop out sometime next year, Disney has been aggressively cutting costs, including de-listing content from Disney+, as a way to get the platform profitable more quickly.
Disney certainly had one thing out of the gate that most other streaming platforms didn’t have: a global name recognition that instantly causes people to notice. It’s not surprising that Disney+ may be the only streaming service with a chance of surpassing Netflix, and when/if the content library gets a significant boost, with the anticipated addition of Hulu, there likely will be a boost to the service in subscribers.
The appraisal of Hulu, which will determine its value, is currently underway, All expectations are that Comcast will sell its stake to Disney, and then Hulu will become part of Disney+, offering its collection of content, much of it geared toward audiences other than Disney fans, through a single platform. But it’s also possible that something else could happen. Even if things happen as expected, exactly how quickly Hulu will become part of Disney+ is unclear.
