Disney+ Shines, Netflix Slows As Streaming Competition Rises

Deepak Gupta February 10, 2022
Updated 2022/02/10 at 7:09 AM

The streaming television race is heating up, with Disney showing on Wednesday that it is closing the gap with market leader Netflix, whose pace has slowed.

The U.S. entertainment giant has surpassed new subscriber expectations for its flagship streaming service Disney+, whose major studio helped it reach 129.8 million subscribers worldwide, about five million more than analysts had predicted.

Netflix ended the year with 221.8 million subscribers, a huge number, but announced a slowdown in growth.

“We certainly understand that the pie is big enough for both companies to be successful,” Tuna Amobi, an analyst at CFRA, said of the streaming rivals.

“What is undeniable is that the competition has become more intense.”

Netflix and Disney+ have seen numbers grow under lockdown lifestyles brought on by the pandemic.

Disney, the Hollywood entertainment giant that turns 100 next year, has seen streaming subscriptions accelerate as pandemic restrictions eased, while Netflix saw them slow.

“Our unparalleled collection of assets and platforms, creative capabilities and unique place in culture give me great confidence that we will continue to define entertainment for the next 100 years,” said Walt Disney Company CEO Bob Chapek in a statement.

The company, with an empire that stretches from movies to theme parks and also includes streamers Hulu and ESPN+, reported earnings that beat revenue forecasts that rose to $21.8 billion in the last three months of 2021.

Disney has a huge pipeline of content and franchises from big names such as Marvel and Star Wars, while Netflix has found success investing in original content from Hollywood and beyond.

“These results speak volumes about Disney’s historic brands and its ability to outperform the competition in an increasingly crowded digital media market,” wrote Paul Verna, analyst at Insider Intelligence.


As Amazon’s Prime video streaming service, Disney is copying Netflix’s tactic of investing in local content that appeals to language, culture and tastes in their respective international markets.

“We’ve created a new organization within the company to guide the development of this content” and look forward to getting “some global successes” from locally produced content, said Disney’s Chapek.

Netflix has made this approach work, supporting original blockbusters like South Korea’s “Squid Game” and France’s Lupine.

Disney said it has about 340 programs in the works outside the United States that are expected to be delivered in the next 18 to 24 months.

Shows or movies made in multiple countries by local talent have been a force for Netflix, which is dependent on international markets to grow now that it is firmly rooted in North American homes.

Disney, based in Southern California, has a presence in only about 60 countries, up from more than 190 for Netflix, but plans to add 100 more by 2023.

Disney+ subscriptions could close the gap with Netflix even further when it enters all these countries, according to Amobi.

In India alone, Netflix, Disney and Amazon are rivals in a market that last year would have between 60 million and 70 million paying subscribers.

International growth, however, comes with the caveat that subscription prices tend to be much lower than those charged in the United States.

Netflix didn’t hesitate to lower its prices in India late last year to stay competitive.

Disney has a subsidiary Hotstar in India, where revenue per subscriber is lower than in other countries where its streaming service is established.

With just under 74 million total subscribers, more than half of them in the United States, HBO and its HBO Max service lack the firepower of Amazon, Disney and Netflix.

A planned wedding with Discovery+, which is expected to be finalized by mid-year, could give HBO a boost.

The NBC-owned Peacock, along with Paramount+ and even Apple TV are, for now, distant runners-up to the main competitors.

“The trends still favor streaming platforms,” analyst Amobi told AFP.

“The pandemic has accelerated these tailwinds. The question is, coming out of the pandemic how many of these winds can reverse?”

Digital TV Research estimates that online video services will have 1.7 billion subscribers worldwide by 2026.

“There is more competition than ever before,” Netflix Chief Executive Reed Hastings said recently.

Overall, he added, there is confidence that traditional television will disappear in the next 10 to 20 years, with streaming becoming the new norm.

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