The streaming wars officially kicked off last month with the debut of Disney+, which registered more than 10 million subscribers within 24 hours of its launch. The video-on-demand service offers users unlimited access to a long list of titles from Disney-owned heavyweights like Pixar, Marvel, and Star Wars in addition to original content for a monthly fee of $6.99.
Netflix takes a huge hit
It appears that the Disney-owned streaming service is already off to a flying start and has apparently dented rival Netflix's subscriber count significantly, according to a new report published by Cowen & Co analyst John Blackledge (via The Hollywood Reporter). The report revealed that Netflix lost more than a million subscriber to Disney+ since its launch.
The Wall Street analyst's report noted that Disney's new streaming service had around 24 million US subscribers towards the end of their debut month, and an estimated million subscribers cancelled their Netflix subscriptions and migrated to Disney+.
However, despite losing subscribers to its rival, Netflix is expected to add more subscribers than it lost and is expected to hit or exceed its fourth-quarter forecast of 7.6 million subscriber additions.
Tough times for Netflix?
The report comes a week after Needham analyst, Laura Martin, downgraded the stock's rating to "underperform," which essentially suggests that investors sell the stock. She added that if Netflix continues to hold on to its subscription prices, which range between $9 and $16 a month, the company will end up losing four million subscribers in the U.S. alone next year.
Martin also noted that the only solution that remains is for Netflix to offer a pocket-friendly subscription fee between $5 and $7 a month and run ads on its platform, as previously reported. This would help Netflix fend off competition from rival platforms including Disney+, Amazon Prime TV, Apple+, Hulu and CBS All Access and new threats from AT&T's HBO Max and Comcast's Peacock, which are slated to arrive next year.
Netflix's rivals are already offering subscriptions for lower prices and although most of them do not have half as much content as Netflix, they've managed to rope in viewers with the content of their own. Furthermore, Netflix will lose a lot of popular content to its rival as "Friends" moves to HBO Max next year and "The Office" to Peacock in 2021. Many of Disney-owned titles will also migrate to Disney+ from Netflix.