Netflix’s business model was robust enough to challenge a well established DVD rental store such as Blockbuster, outmanoeuvring it to the point of bringing physical rentals of DVDs in USA to extinction (CNNBusiness).
Ever since Netflix turned out to be a reliable source of streaming service in USA, many similar services were born to either challenge or dethrone Netflix, but none of them appears to have reached the level of Netflix’s sheer amount of library content inside USA nor to have matched its popularity outside the US.
Considering Netflix’s ongoing presence and immense success, and given other players such as HBO GO, Apple TV, Amazon Prime etc, can the latest entrant in this market segment, Disney+ hold a chance to overtake the popular on-demand video service?
Demographics – Monthly Active Users
According to Variety, Disney+ was initially launched only in five other countries outside the US. So, comparing apples to apples, this article will focus only on American streaming service market.
Current data from App Ape for Android shows that Netflix has more than +30 Million Monthly Active Users (MAU) in the US alone.
On the other hand, Disney+ had a great start. It was launched in November 2019 and in just under a month, it pulled in +10 million users.
Additionally, knowing which age groups and gender are most likely to be watching Netflix or Disney+ could provide a key insight on favorability.
The data from the below graph shows that both male and female users in their 20s and 30s appear to be accounting for the majority of demographics. One thing that particularly stands out here is that female users in their 20s seem to favor Disney+ more than Netflix.
Intellectual Property Vs Quantity
Disney+ overall success might have come from three factors: Walt Disney Studios Intellectual Property, Brand Recognition, and buttload of money. Some of their notable acquisitions are Pixar Animation Studios, 20th Century Studios, Marvel Studios, LucasFilm, ESPN, HULU, and National Geographic Television Network. (IndustryLeadersMagazine).
With possession of all the above mentioned IPs, Disney was already in a comfortable position to launch its streaming service and have enough content to attract large markets to kick start adoption of Disney+. By having access to its various properties on its streaming service platform from its previous acquisitions of Studios, TV networks and Streaming Services, Disney+ is probably and arguably the only real competitor to Netflix.
Disney’s IPs are some of the most recognized properties around the world (Forbes) and if Disney+ is priced aggressively it can easily attract large number of users to its streaming service. According to Variety, Disney+ was launched with monthly subscription fee of $6.99 undercutting Netflix’s base subscription price of $8.99.
Other advantage for Disney+ is that it need not wait nor worry for its streaming service to be profitable enough to produce new content when necessary. According to Boxofficepro, Walt Disney Studios has grossed upwards of $13 billion globally across its Disney and Fox film releases in 2019.
Therefore, considering Walt Disney Studios’ economies of scale, seemingly never ending budget for producing new contents, and enormous network, there is no denying that dethroning Netflix for Disney+ could just be the matter of time.
User Activity and Availability
Apart from having some of the biggest IPs, the overall content is far less compared to Netflix library which is reflected in the lower subscription fee. According to Vox, as of January 2020 Netflix library contained nearly 6000 Movies and TV shows. Netflix has also produced many of its own TV shows that has gained universal praise.
Nevertheless, it is difficult to say the overall impact of Disney+ on Netflix just yet. But judging from usage frequency data gathered from App Ape, Disney+ seems to be the new favorite streaming service after all. In the below graph, the usage engagement is around 73% for Disney+ and only 59% for Netflix.
When pitted against each other, the gap seems to be closing ever so quickly and Disney+ could seamlessly catch up to Netflix in terms of MAUs sooner than later.
Currently, Disney+ is available only in six countries and it is expected to expand to more viewers in other countries in the near future. It also costs less than Netflix due to having limited contents compared to that of Netflix. However, whether Disney+ can dethrone Netflix or not is up to the consumers who choose to jump ship from one streaming service to another.
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