Netflix (WKN: 552484) i Walt Disney (WKN: 855686) are, of course, competitors in the streaming market. Investors are always watching how the results and subscriber count are developing. This is nothing but market leadership. Although there is still some air between these two flagship services.
But there are differences between Walt Disney and Netflix. Only the history of its creation and operational orientation are different. After all, behind the previous top streaming dog there is something like a streaming company. On the other hand, the media and entertainment group has leaned towards this market because it has so much content that has grown historically.
In the current quarterly reporting season, Netflix surprised with more solid data than expected. And it hit Walt Disney with a statement in numbers. Indirect but with a very clear reference.
Netflix distributed by Walt Disney
Of course, Netflix always tries to highlight its advantages in the business model. This was the case in the data for the second quarter and in the comments. Partly at the expense of Walt Disney, who arguably demonstrates this statement very strongly:
As a purely streaming company, we are also not burdened with legacy revenue streams. This freedom means we can offer top movies directly on Netflix without the need for longer or exclusive movie schedules, and members can watch TV series without having to wait weekly for a new episode. This focus on member selection and control affects all aspects of our strategy and creates what we call a significant long-term business advantage.
By the way, the translation is mine. But where is the relationship with Walt Disney? Put simply: Netflix actually tells the story of the origins of the American company and it turns out that the media and entertainment giant originally also produced formats for cinema screens. And some are still in production. When it comes to content delivery, there are still some rules and other things that you need to use. The focus isn’t just on the Disney + streaming service. This is also due to the previous business.
Without mentioning Walt Disney, Netflix therefore claims that other people’s operational orientation has flaws. And I think it makes a pretty direct relationship. But does this argument make sense in itself?
This is a fact
Netflix, of course, points out that Walt Disney has other commitments as well. It can also benefit from monetizing your content in a variety of ways. Most importantly, the content competes internally with its release to theaters. Or directly for your own viewers on streaming services. It can also be a significant future competitive advantage when it comes to negotiating where to publish your content.
At the same time, Walt Disney produces so much and so strong content that there is enough for both orientations. Cross-subsidization within the group seems possible. Compared to Netflix, I also consider it an advantage.
There may be benefits on both sides, but ultimately it is up to us as investors to determine the best overall package. But I share the main message of the smack only to a limited extent.
Did you hear that, Walt Disney? Netflix’s cheek is almost impossible to ignore! he first appeared in The Motley Fool Germany.
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Vincent owns shares in Netflix and Walt Disney. Motley Fool owns and recommends Netflix and Walt Disney and recommends the following options: $ 145 long link from January 2024 to Walt Disney and $ 155 short link from January 2024 to Walt Disney.
Motley Fool Germany 2022