Netflix stocks took a tumble on Friday after Disney’s grand press conference in which they laid out details of the upcoming Disney+ streaming service.  The concern stems from many believing that Disney+ could take away a significant number of subscribers from Netflix due to its lower price– $6.99 per month, or $69.99 for a year.  On the other hand, Netflix recently upped its rate from $11 to $13 per month.  As a result, Netflix stocks dipped 4.5%, but it is up 13.6% over the last 12 months.  On the flip side, Disney stocks increased 9% the day after the press conference.

The Disney+ service is packed with time-tested content.  Pretty much every Disney movie or TV show ever made will be available, along with the entire Pixar library.  By the end of the first year, every ‘Star Wars’ movie will be on the service, along with most of the Marvel movies, except for those that are contractually parsed out to other services.  In addition, Disney+ will carry various properties that the company recently acquired from buying out 21st Century Fox, including the entire 30 season run of ‘The Simpsons’, which will, going forward, only be available to stream on Disney+.

In addition, there is a ton of exclusive original content being delivered, including the expensive new ‘Star Wars’ series, ‘The Mandalorian’, new Pixar shorts and series, including ‘Monsters at Work’, and miniseries starring the heroes of the Marvel Cinematic Universe, beginning with ‘Falcon & Winter Soldier’.

It is a lot of content for a decidedly low price, but as was stressed at the press conference, and as analysts are keen to remind investors, Disney+ is a family service.  Its target audience is families with little kids.  On the flip side, Netflix can offer a wider range of programming including much that is strictly for adults.  A perfect example is the Marvel-based shows that it already carries.  ‘Daredevil’, etc. are for adults only.  While Disney+ will carry original Marvel programs, it will all be for general audiences.

As analysts from SunTrust wrote:

“Bottom-line, Disney+ features family content, while NFLX offers a much broader range of content with the majority of the most-searched content on the platform.  As such, we do not view Disney+ as a strong alternative to NFLX.”

According to a poll they took, only 8% of current Netflix subscribers plan to switch to Disney+, 59% plan to stay subscribed to Netflix only, while 24% planned to continue to subscribe to Netflix while adding Disney+.

Mark Mahaney of RBC Capital Markets says that Disney’s back catalog is a major drawn, but stated:

“We did our survey work here, we think the vast majority of consumers are perfectly willing to sign up for more than one service.”

Not mentioned is the fact that Disney now owns a 60% controlling interest in Hulu, which it can use to offer more adult-skewing material.  And at the press conference, it was revealed that there are plans underway to offer a bundle deal to offer a discount for subscribers who order Disney+, Hulu, and ESPN+, but it doesn’t appear that this will be available when Disney+ launches in November.

What do you think?

Source: CNBC