Last week, Disney published its latest quarterly report detailing the latest information about its on-the-rise OTT platform, Disney+. Combined with Hotstar (in India and Asia) and Hulu (in the USA), Disney+ now possesses just over 173 million subscribers. This indicates an increase of 25.5 million subscribers over the past quarter, and is a reflection of the growing popularity and success of the relatively nascent platform.
From its launch in 2019, Disney+ has been seen as an equally capable alternative to Netflix, the elder statesman of OTT platforms. However, these latest reports tell us that Netflix needs to start looking over their shoulders, as Disney+ is just on the cusp of taking over the incumbent market leader spot.
In the same period, Netflix has added just one million new subscribers. As described by the company, this was a slow quarter for them. This may be attributed to a saturation of the total market, as the platform is beginning to run out of further room to grow under its current business model; but it doesn’t belay the fact that Disney+ is now just 35.5 million subscribers short of Netflix’s total subscriber count.
Rosenblatt Equity Research, in its analysis of these trends, has concluded that Disney+ will surpass Netflix in terms of total viewership and subscription by as soon as 2024 – almost half the time that Netflix took to reach its current standing. The other large name in the OTT sector, Amazon Prime Video, is a distant third.
In terms of earnings, Netflix still holds a comfortable margin over the competition – after all, it is the most expensive platform of the three largest options on the market. However, even this position is under threat, due to Disney’s ad-based approach. Netflix has been extremely vocal about its choice to stay away from an advertisement-fuelled revenue model; and while the platform should be commended for holding such a stance, this decision severely limits its earning potential, particularly in the face of rising competition from its well-resourced and popular competitor.
Only time will tell how the dominoes fall over the next few years; but based on these current trends, it appears as though Disney+ is coming for the crown of the OTT market. It is a remarkable debut for the platform, which came onto the scene 12 years after Netflix began its streaming operations, and the pressure is now on Netflix to rebound from a slow quarter and respond. Regardless of who comes out on top, viewers are most certainly set to benefit.