KEY POINTS

  • Disney Plus poached 1 million Netflix subscribers until November-end
  • Half a million more U.S customers of Netflix may switch to Disney fold, according to a survey
  • ViacomCBS enters the fray to take on Netflix and Disney Plus

Disney Plus, the streaming business of Walt Disney Company notched up an estimated 24 million U.S. subscribers by the end of November and it took away almost 1 million subscribers from the market leader Netflix.

This was revealed in a Wall Street analysis published Wednesday carrying estimates from the research team of Cowen & Co that surveyed 2,500 U.S. consumers in November, according to a report by Variety. 

The strong debut of Disney Plus backed by its streaming package marketing boosted cancellations among Netflix customers, it added.

The analysts also expect 500,000 more Netflix subscribers will join Disney Plus by the end of the year.

The survey on streaming war revealed 21 percent of total respondents signed up for Disney Plus in November explained the swelled customer base at 24 million. 

There were 19.4 million dual consumers who subscribed to both Netflix and Disney Plus marking 80 percent overlap between the services, the survey noted.

Disney’s content mix working well

Commenting on the successful poaching of Disney Plus into Netflix user base, Fox News report said the numbers are a testimony that Disney’s content mix of Marvel, Star Wars movies, animated films, and new shows have worked well. The animated films include the “Aladdin” and “Beauty and the Beast.”

Disney Plus made its debut with a record 10 million sign-ups on its very first day, the report noted.

The survey results defied earlier Wall Street forecasts for Disney Plus that pegged its user base to be less than 20 million subscribers worldwide by 2020. 

This is despite a good lift from the one-year-free offer marketed via Verizon wireless. However, it is noteworthy that a large chunk of Disney Plus users in the U.S. is not paid customers as 34 percent of Disney Plus’ U.S. customers as of late November are from the year-long free offer from Verizon. 

The survey notes Disney Plus may also face a churn once the Verizon freebie gets over in late 2020. 

Meanwhile, competition is growing in the streaming segment.  Both CBS and Viacom announced Wednesday that they are back together after parting ways a decade ago, reported USA Today. 

The new company ViacomCBS is planning to offer Paramount Pictures, the CBS broadcast network, and pay-TV channels including MTV, Comedy Central, and Nickelodeon under a single roof.

Bob Bakish, president and CEO of the newly combined company with CBS News called it a “historic moment” and aims to snatch 22 percent of U.S. television viewing.  New on Disney Plus in December 2019 "The Mandalorian" episodes 5-8 will come to Disney+ in December along with "Star Wars: The Last Jedi" and "Thor: Ragnarok." Photo: Disney+; Lucasfilm; Marvel Studios

Netflix hopes the changes are manageable

Meanwhile, Netflix looks unfazed from the expanding competition and its letter to the shareholders revealed that optimism. 

The higher churn for Netflix “appears manageable”, the Cowen analysts led by John Blackledge also noted.

“The incremental churn uptick for Netflix appears reasonable given that Disney+ launch was highly publicized and had many marketing programs,” the analysts wrote.

Cowen’s analysts see Netflix’s “strong” content to could minimize the blow from Disney Plus. The programs include “The Irishman,” “6 Underground,” “Marriage Story,” “The Crown” Season 3 and “The Two Popes.”

The letter of Netflix on October 16 to shareholders anticipates the escalation and reassures shareholders that it is manageable saying: “Many are focused on the ‘streaming wars,’ but we’ve been competing with streamers such as Amazon, YouTube, Hulu as well as a linear TV for over a decade.”