January 22, 2020
With Netflix citing increased fourth-quarter (ended Dec. 31, 2019) domestic churn among existing subscribers as a response to new SVOD service launches from Disney and Apple, concern is growing about the impact of Disney’s accelerated SVOD launch plans in Europe in March.
Indeed, Netflix added 420,000 subscribers in the U.S. in the quarter, which was down from 600,000 projected. Outside the U.S., Netflix said it has seen a more “muted impact” from competitive launches in Canada, Australia and Holland.
“As always, we are working hard to improve our service to combat these factors and push net adds higher over time,” executive wrote in the shareholder letter.
Speaking Jan. 21 on the pre-recorded fiscal interview, CFO Spencer Neumann said that while Disney remains a global brand, its streaming service remains largely focused on catalog programming with a few original shows other than the “Star Wars” spinoff “The Mandalorian.”
“[Disney is] not more popular than they are in the U.S. anywhere else in the world,” Neumann said.
CEO Reed Hastings contends the rise of rival SVOD services is having more of an impact on pay-TV than Netflix in particular.
“Remember that we compete a lot for time with YouTube,” Hastings said. “And it’s not dollars because that’s ad supported. But we compete very broadly for viewing and as [previously] mentioned our viewing on a per-member basis is up. And that’s because our content is getting better. Our service is getting better. And that’s all coming out of linear TV.”