Disney Plus Gives a Huge Blow To Netflix: Analysts Estimate

One of the biggest questions ever since big launches like Disney Plus and Apple TV Plus came into the competition was as to if these new streamers will make any difference to current leaders Netflix and Amazon Prime Video among others.

While when it comes to Apple TV, they hasn't been talked about much yet but according to a report in Variety, Disney Plus has given a blow of sorts to Netflix.

Disney Plus had snagged an estimated 24 million U.S. subscribers as of the end of November — and the strong debut for the Mouse House’s new streaming package boosted cancellations among Netflix customers, according to a new Wall Street analysis.

The estimates come from the research team at Cowen & Co., based on a census-weighted survey of 2,500 U.S. consumers conducted last month. Per the survey, 21% of total respondents said they signed up for Disney Plus in November, suggesting the 24 million customer base exiting the month. That would blow away previous Wall Street forecasts for Disney Plus, which had pegged less than 20 million subs worldwide for 2020 even after factoring in expected lift from the one-year-free offer from Verizon for certain customers.

“The incremental churn uptick [for Netflix] appears reasonable given the Disney+ launch, which has been highly publicized and includes various marketing programs, including a Verizon promotion that offers Disney+ for free for one year,” the analysts wrote.

 it’s worth noting that a large swath of Disney Plus users in the U.S. are currently not paying for the service.

About one-third (34%) of Disney Plus’ U.S. customers — or 8 million as of the end of November — are on one-year-free offer from Verizon for certain customers, while the remaining 66% are on paid plans, Cowen’s analysts estimated. The survey data indicated there were about 19.4 million consumers who subscribe to both Netflix and Disney Plus, implying an 80% overlap between the services.

With big new rivals coming to market, Netflix has sought to reassure investors it can weather the storm. “Many are focused on the ‘streaming wars,’ but we’ve been competing with streamers (Amazon, YouTube, Hulu) as well as linear TV for over a decade,” the company wrote in its Oct. 16 letter to shareholders. “The upcoming arrival of services like Disney+, Apple TV+, HBO Max, and Peacock is increased competition, but we are all small compared to linear TV.”