Disney Plus: Netflix’s internal data suggests users aren’t fleeing to new rival
Netflix Inc.'s internal data suggests the streaming giant hasn't been hurt yet by the launch of rival services from Walt Disney Co. and Apple Inc., according to a person briefed on its subscriber information.
The number of customers cancelling Netflix hasn't accelerated around the debut of those services, said the person, who asked not to be identified because the company's so-called subscriber churn is proprietary information. Netflix declined to comment.
External data from Google searches and market tracker Sensor Tower Inc. have corroborated the idea that Netflix is holding its ground, according to Credit Suisse Group AG. But those measures are more focused on whether the company is still attracting new customers, rather than losing the ones it already has.
Netflix shares climbed as much as 1.3% to $314.40 in late trading on Friday, rebounding from an earlier decline. The stock is up 16% this year through the close.
Wall Street has been closely watching to see how new streaming platforms -- particularly Disney's -- will affect Netflix's dominance. The Disney+ service attracted 10 million subscribers within a day of launching in North America, a pace that blew past analysts' predictions.
The early results buttress Netflix's argument that there's room for many competitors, and the success of new rivals won't be at its expense. Many customers will be fine with paying for both the $7-a-month Disney+ and the $13-a-month Netflix as they transition away from cable and satellite packages, Chief Executive Officer Reed Hastings has said.
Still, it's early days. While subscribers may be unlikely to cancel Netflix on the very day they sign up for Disney+, they might decide later that they don't need both, leading to higher churn. And more services are headed for the market, including Comcast Corp.'s Peacock and AT&T Inc.'s HBO Max.
Netflix investors have other reasons to be concerned. The company has added fewer customers than it forecast in the past two quarters, and it's on pace to sign up fewer customers in 2019 than it did a year ago.
Netflix executives have downplayed fears of a slowdown, blaming the shortfalls on the challenge of forecasting and a recent price increase. They did acknowledge, however, that new competition may be playing a small role.
The Los Gatos, California-based company is still on pace to add more than 25 million customers for the second year in a row, all while increasing the average price that those customers pay.
"The launch of these new services will be noisy," the company said in a letter to shareholders in October. "There may be some modest headwind to our near-term growth, and we have tried to factor that into our guidance. In the long term, though, we expect we'll continue to grow nicely given the strength of our service and the large market opportunity."