Since last November, the so-called ‘streaming wars’ started in earnest with the launch of Apple (AAPL) TV Plush and Disney Plus, as two corporate giants sought to challenge the hegemony enjoyed by Netflix. It has proven to be an eventful few months as Disney hit the ground running with Disney Plus and garnered 10 million sign-ups within a week.
Key Analysis
Netflix (NFLX) still remains the biggest player in the streaming space, but that being said, Disney seems to have the wherewithal to challenge it. Some analysts believe that the Disney stock could, in fact, be a better one in the long run.
First and foremost, it should be noted that Disney (DIS) is a far bigger company with interests as diverse as theme parks and a range of media businesses. It has established Disney Plus in addition to that, and that is the sort of luxury that Netflix does not have. In addition to that, Disney owns a vast amount of premium content going back several decades, and it is also spending billions on new programming. That is a clear cut advantage and one that would help the company in providing high-quality content without actually spending a lot.
Its theme parks provide the company with steady cash flow, and its proven track record of success in the entertainment business makes it a stock that cannot be ignored at all. While it is true that Netflix has had its share of struggles in 2019, it managed to rebound quite strongly in its latest quarter.
It is likely that the streaming giant is going to continue to grow at a fair clip in the years to come. It spent $3.3 billion in 2019, and analysts believe that despite subscription growth, Netflix may never be able to generate more than its expenses from subscriptions. Analysts also believe that Disney gives investors a path into the streaming space with far less downside risk since the company has many other lines of successful businesses.
