Netflix Execs Say They’re Not Afraid of Disney’s Streaming Service

Using a tablet to research market data

Netflix isn't afraid of competition from Disney's upcoming direct-to-consumer offering, executives told investors Monday. " We don't see it as a threat to us any more than Hulu has been," said Netflix CEO Reed Hastings during the company's Q4 2017 earnings call. He added that he'd expect Disney's service to be "very successful" because of the company's brands and content.

"I know I'll be a subscriber of it," Hastings admitted.

Disney announced last summer that it plans to launch a Disney-branded video subscription service in 2019. As part of that effort, Disney chose not to renew its distribution agreement with Netflix, which means that theatrical releases from 2019 on will stream on Disney's own service instead. And in December, Disney announced the planned $52.4 billion acquisition of 20th Century Fox , which could ultimately further bolster Disney's service.

"I was as surprised as anyone that Fox was willing to sell," Hastings said.

Netflix's Q4 2017 letter to investors acknowledged both with a whole paragraph, noting that Disney's service will have "a beloved brand and great franchises."

However, the letter argued that the success of both Hulu and Netflix in the same market was evidence for the fact that there's room for more than one winner: "Entertainment services are often complementary given their unique content offerings. We believe this is largely why both we and Hulu have been able to succeed and grow."

Netflix also called out Amazon and Apple as competitors in the market for ad-free premium streaming content: "Amazon Studios is likely to bring in a strong new leader given their large content budgets, and Apple is growing its programming, which we presume will either be bundled with Apple Music or with iOS."

Finally, it made note of ad-supported video services, including Facebook's growing investments in video - but also argued that these could actually help Netflix grow its audience: "With their multi-billion global audiences, free ad-supported internet video is a big force in the market for entertainment time, as well as a great advertising vehicle for Netflix."


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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