The streaming television race is heating up, with Walt Disney Co on Wednesday showing that it is closing the gap with market leader Netflix Inc, whose stride has slowed.
The US entertainment giant blew past expectations for new subscribers to its flagship streaming service Disney+, whose big studio muscle helped it reach 129.8 million subscribers worldwide, about 5 million more than analysts had predicted.
Netflix ended the year with 221.8 million subscribers, a massive number, but it announced slowing growth.
Netflix and Disney+ saw subscriber numbers boom under the lockdown lifestyles brought about by the COVID-19 pandemic.
Disney, the Hollywood entertainment behemoth that turns 100 next year, saw streaming subscriptions pick up pace as pandemic restrictions ease, while Netflix saw them slow.
“Our unmatched collection of assets and platforms, creative capabilities, and unique place in the culture give me great confidence we will continue to define entertainment for the next 100 years,” Disney CEO Bob Chapek said in an earnings statement.
The company, with an empire that stretches from movies to theme parks, and also includes streamers Hulu and ESPN+, reported profit that surpassed forecasts on revenue, surging to US$21.8 billion in the final three months of last year.
Disney has a huge pipeline of content and big name franchises such as Marvel and Star Wars, while Netflix has found success investing in original content from Hollywood and beyond.
Like the Prime video streaming service fielded by Amazon.com Inc, Disney is copying Netflix’s tactic of investing in local content that appeals to the language, culture and tastes in respective international markets.
“We have created a new organization in the company to shepherd development of that content” and hope to get “some global hits” out of locally produced content, Chapek said.
Netflix has made that approach work, backing original blockbusters such as Squid Game from South Korea and France’s Lupin.
Disney said that it has about 340 programs in the works outside the US that are expected to be delivered in the next 18 to 24 months.
Shows or films made in various countries by local talent have been a strength for Netflix, which is relying on international markets for growth now that it is firmly entrenched in US households.
Disney, based in southern California, is present in only about 60 countries — compared with more than 190 for Netflix — but aims to add 100 more by next year.
Disney+ subscriptions could further close the gap with Netflix once it enters all those countries, CFRA Research analyst Tuna Amobi said.
In India alone, Netflix, Disney and Amazon are rivals in a market that last year was reported to have about 60 million to 70 million paying subscribers.
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