Apple TV+ and Disney+ may be the two new kids on the streaming services block, but the majority of Netflix subscribers are in no rush to check them out.
According to a survey carried out by Piper Jaffray analysts, around 75% of current Netflix subscribers have no plans to subscribe to either new service. That’s good news for Netflix investors in the short-term. But I’m not convinced that it gives a fair indication of what might eventually happen.
“Our survey suggests that the majority (~75%) of Netflix subscribers do not intend to subscribe to either Disney+ or Apple TV+,” writes Piper Jaffray analyst Michael Olson. “For those that do expect to use one of these offerings, the vast majority expect to also maintain their Netflix subscription.”
Piper Jaffray clearly isn’t expecting Netflix customers to go anywhere for now. It has a price target of $440 per share. Since Netflix closed at $268.03 a share on Wednesday, that is a 64% increase on the current stock price. Concerns about Netflix’s future have already seen stock drop almost 30%. In doing so, it wiped out Netflix’s 2019 gains.
I don’t disagree with the assertion that most people will stick with Netflix. In a relatively small space of time, Netflix has established itself on the pop culture landscape like few other companies. It’s been a massive disruptor, both in terms of taking on movie theaters and TV, and prompting tech companies to make their own content. That’s something that everyone from Amazon to Apple are now doing — but which seemed crazy just a few years ago.
Apple TV+ and beyond: Netflix has some challenges ahead
Netflix has some challenges in its future. Licensing content is a big one, which is why it’s leaned so hard into making its own shows. House of Cards, The Crown and Stranger Things all came along because Netflix knows that it could lose big established shows like Friends. Or it could have to pay such a crazy premium for them that it’s not economically viable to do so.
For the most part, people seem happy with Netflix. Sure, its collection of movies isn’t what it could be. But, anecdotally, most of my friends seem happy with it. New streaming services are taking on an established giant people already like. That’s not to say they can’t do it. Disney has a massive well of content. Apple TV+ has attractive pricing and some interesting shows up its sleeve. But people need to be convinced to leave something they like.
Should either new service introduce hits like Stranger Things I have no doubt we’ll see a certain number of people lining up to leave Netflix for greener pastures. And, hey, even if it’s only the 25% Piper Jaffray describes, that’s still 37.5 million people!
Are you planning to leave Netflix for Apple TV+ or Disney+? What do you think the ramifications will be of new services flooding the market? Let us know your thoughts in the comments below.
Source: CNBC
