“Yes,” says analyst Daniel Ives, who estimates that together the two “stalwarts” could steal 10% of Netflix’ subscribers base.
From a note to clients that landed on my desktop Sunday:
This week marks another important potential turning point in the streaming wars when Iger and Disney officially launch their much anticipated streaming TV service on Tuesday, November 12th… With content being king and Netflix the clear leader in streaming with ~160 million subs worldwide, the goal of Disney and Apple is clearly shaking this leadership position as we continue to believe that 10%+ of Netflix’s installed base could be disrupted/higher churn by these two stalwarts entering the streaming landscape.
Our take on Apple streaming vs. Disney: With an installed base of ~900 million active iPhones worldwide, we believe Apple has an opportunity to gain 100 million consumers on the streaming front in the next 3-4 years. We note that Apple is offering Apple TV+ free for a year with the purchase of an Apple device to help stimulate demand for its trifecta of smartphones and build loyalty on the services, which we believe is a smart move. Apple has a compelling list of new shows (The Morning Show, For All Mankind) launching with only nine programs, although we believe Cook & Co. has committed ~$6 billion annually [!] to original shows/movies to beef up its streaming content ambitions going forward along with potential M&A (MGM, Lionsgate, Sony Pictures, A24).
Disney on the other hand has a whole other strategy as the company has a content library that is unmatched with a global consumer base that will be tapped through its theme parks and other vast distribution tentacles. With aggressive price points and an eye popping library of content we believe the House of Mouse will further flex its content muscles on streaming over the next few years.
My take: This is the second time Ives has estimated that Apple is spending $6 billion annually. Every other analyst I’ve read thinks it’s more like $6 billion total.