It is official, Disney has declared war to Netflix. August this year, Disney announced that it will end its partnership with the streaming service in 2019 and will pull back all its materials. The main reason for this is that Disney is planning to launch its own streaming service, to compete with market leader Netflix.
However, Netflix does not easily give in to Disney’s attack. Soon after the announcement that Disney is not extending the partnership, Netflix came with its own big news. Netflix announced it signed on Shonda Rhimes, the creator of hit series like “Grey’s Anatomy,” “Scandal” and “How to Get Away with Murder. Additionally, Netflix plans to spend almost 16 billion dollars on creating its own content. This will give Netflix an advantage, since it can make specific series to tap into the needs of its customers. With over 100 million subscribers, Netflix has acquired large amounts of data on what people are watching. It can therefore make specific content targeted on these needs, to better make use of the long tail effect.
On the other hand, Disney also has a great fan base, who are likely to subscribe for the Disney streaming service to be able to still watch the many Disney movies. This might cause a decrease in subscribers for Netflix. Furthermore, the announcement of Disney pulling its content already caused the Netflix stock to fell more than 2%. Thirdly, Like Netflix, Disney is also planning to create original content based on its current library.
Time will tell, who will be the winner of this battle. Both companies have strong customer’s bases, and history of creating valuable content for its users, so the fight will not be an easy one. One thing is sure, users will benefit from this battle by enjoying even more series and additional content to watch!
Sources:
http://money.cnn.com/2017/08/14/investing/netflix-disney-content-costs/index.html
http://money.cnn.com/2017/08/14/media/shonda-rhimes-netflix/index.html?iid=EL
http://money.cnn.com/2017/08/09/media/disney-netflix-streaming/index.html?iid=EL
https://www.usatoday.com/story/tech/news/2017/08/22/netflix-disney-amazon-and-others-vie-top-talent-and-content/566322001/
