Netflix tumbled 4.5% on Friday after Disney unveiled its Disney+ streaming service in addition to pricing for the 1st time. The drop shed more than $7 billion via Netflix’s market value, though of which is usually up 13.6% over the past 12 months.
While some analysts seem less concerned of which competition via Disney+ will be a significant hit to Netflix’s business, investors may still be uneasy with the entrance of a cheaper service which has a huge library of time-tested content. Disney+ subscriptions will give consumers access to exclusive content for $6.99 per month or $69.99 for a full year, compared with Netflix’s standard plan offering of $13 per month, recently raised via $11. Shares of Disney soared 9% Friday.
Disney+ in addition to Netflix could certainly coexist in consumers’ library of streaming services. Disney CEO Bob Iger made clear of which the brand new service is usually aimed at kids, saying of which different offerings like sports in addition to adult content are available on their different services like ESPN+ in addition to Hulu.
“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.” analysts via SunTrust wrote in a note Friday. “As such, we do not view Disney+ as a strong alternative to NFLX.”
The analysts added of which in a recent survey conducted by the firm, only 8% of existing Netflix subscribers who responded expect to switch to Disney+, while 59% required to continue to subscribe only to Netflix. Twenty-four percent of respondents required to subscribe to both services, according to the survey.
Disney+ could actually be a positive for Netflix, the analysts wrote, since the entrance of a brand new streaming player could further “accelerate cord-cutting.”
Still, different analysts see a significant threat in Disney’s offering. Mark Mahaney of RBC Capital Markets told CNBC on Friday of which Disney incorporates a “major advantage” over Netflix because of which does not need to spend much to build up its already-full content library.
“There is usually going to be pressure here on Netflix to continue to differentiate their service with more in addition to more original content spend, of which’s the major advantage … of which Disney has — they’ve got a back catalog,” he said. Still, Mahaney said he still believes consumers will be willing to sign up for both services if they’re both robust.
“We did our survey work here, we think the vast majority of consumers are perfectly willing to sign up for more than one service,” Mahaney said.
contributed to of which report.
Disclosure: Comcast, which owns CNBC parent NBCUniversal, is usually a co-owner of Hulu.
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