It began, like all terrible ideas do, with an idea thought into existence by a frat boy. A male college student, let’s call him Derek, was having some difficulty with the ladies. It wasn’t that girls weren’t interested in Derek, but he could never seem to make it past the first couple of dates. The pattern was consistent. The first date would go off swimmingly, he’d make her laugh about the most recent Kevin Hart film, she’d tell him he was funny for a fray guy, then the second date would come around, smooth as the last. Derek never made it past the second date, because he didn’t know how to initiate romantic contact, he was far too nervous. If only there were a way to invite a girl back to his place, relax, set the mood, and let the magic happen. On one fateful evening, Derek invented the “Netflix & Chill.”
By simply turning on an episode of “The Office,” Derek’s dates suddenly felt much more comfortable around him, and kisses flowed like Niagara. Netflix (NFLX), the popular streaming site, enjoyed unprecedented success as a result of Derek’s romantic innovation. When the company started back in 1999, as a mail-order DVD service with less than 1 million subscribers, no one could’ve imagined that Netflix (NFLX) would become an Emmy-winning multimedia powerhouse.
Now the streaming site has over 130 million subscribers, nearly double the population of the United Kingdom. Since its inception, subscribers have elected to “unplug” from their cable subscriptions and switch over to Netflix (NFLX). With a massive catalog of “Netflix original” series, the company has been killing the media industry game. But, as any investor knows, when a company enjoys unprecedented success, others take notice and plans are put in place to overtake such success stories.
Inside the secret boardroom located in Cinderella’s castle at Disney World, Bob Iger, Disney’s (DIS) CEO is plotting, oh boy, is he plotting. Iger, the wonderful leader of Disney (DIS) announced on Thursday unveiled the name for its new streaming service set to launch next year: Disney+ (DIS). The announcement comes at an opportune time for Disney (DIS) to up its clout in the TV/Film industry, as the company awaits government approval for its $73.1 billion acquisition of a 60% controlling stake in 20th Century Fox (FOX). Assuming this deal goes as planned, Disney (DIS) will gain control over Hulu, a popular streaming site full of primetime content from NBC, Fox (FOX), ABC, and other major networks. Iger also mentioned Disney+ will retain the rights to content from the many brands in the company’s pocket including Marvel, Star Wars, Pixar, ESPN, and National Geographic.
Barry Diller, Chairman and Senior Executive of InterActiveCorp (IAC), commented on Disney’s (DIS) plans for an attack on Netflix and other streaming companies in the industry:
“Netflix was another kind of accident which is all of the incumbents, all the movie companies, television companies sold their product to Netflix, built Netflix and now are at the mercy of Netflix. The idea that you can compete for head to head with Netflix, I think it’s a fool’s day.”
–Barry Diller, Chairman and Senior Executive, InterActiveCorp
Netflix (NFLX) has shown no sign of slowing in the stock market, up over 1000% in the last five years according to recent statistics. Currently trading at $311.58 per share, investors in the space believe Disney’s (DIS) new service will spark competitive growth for both media brands.
While Netflix (NFLX) has been doing incredibly well with its content and increase in subscribers, you simply cannot compete with Disney (DIS). The company, currently trading $119.14 at per share, literally runs the film industry, making $1.24 billion in global ticket sales just from the reals of Pixar’s “Incredibles 2.” Disney (DIS) will only grow stronger as it feeds on the revenue streams from Fox assets like the X-Men movies and James Cameron’s upcoming “Avatar” sequel.
With the Disney+ (DIS) set for 2019, it will only be a matter of time before Mickey Mouse gives Netflix (NFLX), Amazon Prime (AMZN), and all the other streaming services a run for their money.
