Netflix warns investors of ‘headwinds’ caused by Apple TV+ and Disney+

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75% of Netflix users have no plans to jump ship to Apple TV+ (right away)
75% of Netflix users have no plans to jump ship to Apple TV+ (right away)
Photo: Stock Catalog/Flickr CC

Netflix warned investors that the upcoming launch of Apple TV+ and Disney+ could generate “modest headwinds” when it comes to new subscriber growth. Despite the warning, Netflix shares surged in after-hours trading today after it reported better-than-expected earnings.

In a letter to shareholders, Netflix didn’t sound too worried about the upcoming streaming wars. The company pointed out that it’s already been competing against streamers and regular TV for over a decade now.

“The upcoming arrival of services like Disney+, Apple TV+, HBO Max, and Peacock is increased competition, but we are all small compared to linear TV,” the company said. “While the new competitors have some great titles (especially catalog titles), none have the variety, diversity and quality of new original programming that we are producing around the world.”

Apple TV+ launches on November 1 and will only have a handful of original titles in its catalog. Meanwhile, Disney+ will launch with an exhaustive list of old Disney movies and some original TV series. Both services plan to attract new subscribers with their ridiculously cheap price tags. Apple TV+ costs $4.99 per month while Disney+ will come in at $6.99 per month compared to $12.99 per month for the standard Netflix plan.

Increased competition has sparked a bidding war for content in Hollywood. Apple has been spending aggressively on original content with some of its shows costing more to make than Game of Thrones. Netflix is still outspending Apple for now though and says it’s not afraid to take bold swings on new content.

Netflix won’t likely drop prices anytime soon but a price hike is also certainly out of the picture for the foreseeable future. US subscriber growth in 2019 has been about half of what it was in 2018. CEO Reed Hastings has attributed the drop mostly to the price hikes.