A Saturated Market with Increased Competition

$Netflix(NFLX.US)$ was the only dominant force in the video streaming market. It was able to grow its user base rapidly during that time due to such a lack of competitive forces. However, now the tables have turned for the company as a vast number of streaming options such as Amazon Prime Video, $Disney(DIS.US)$ Disney+, and $AT&T(T.US)$ HBO Max have sprung up.

Netflix can earn higher revenue either by attracting more subscribers or by raising its subscription prices. The company has tried to occasionally raise its price, but this strategy is not suitable for such a highly competitive market the company is surviving in. So, it is spending billions of dollars each year to produce high-quality content to bring in more subscribers and keep existing ones engaged.

Despite that, in the U.S. and Canada markets, Netflix has added only 1.3 million net new subscribers. Moreover, in international markets, its growth isn’t a sure thing. Like in India, it is trying to catch up with Amazon Prime Video and Disney’s Hotstar and has even tried to slash prices in South Asian nations in an effort to attract more viewers.

Disney+ added 11.8 million new subscribers last quarter to reach 129.8 million subscribers, Disney announced as part of its Q1 2022 earnings release, and said it’s still on track to reach 230 to 260 million subscribers by 2024. The company’s quarter beat projections after only adding 2 million subscribers in the previous quarter.

As for Disney’s other streaming services, Hulu added 6.6 million new subscribers to reach 45.3 million subscribers and ESPN+ added 4.2 million subscribers to reach 21.3 million. Total subscriptions across Disney’s streaming portfolio reached 196.4 million.

Disney is aiming to spend $33 billion on new content this fiscal year to gain new subscriptions and continue the momentum from the quarter. Chapek also stated that the streaming service is still on track to reach 230 million to 260 million Disney+ subscribers by the end of fiscal 2024.

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doctorpot1 : why not WarnerMedia Discovery $Discovery-A (DISCA.US)$ ? the soon to be newly merged entity?

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Strik57 doctorpot1 : totally agree

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