If there is a streaming bubble, it is only bursting Netflix. Disney+ is the best example

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Disney+ continues to ride a currently unstoppable line of upward growth, as communicated to its shareholders in its first quarter 2022 earnings report. The platform has increased its number of subscribers by 7.9 million, which represents a total of 137.7 million, a 33% increase compared to last year and a notable increase in expectations: analysts were talking about five million of new subscribers on average.

Netflix’s problems are Netflix’s. Undoubtedly, these figures contrast, above all, with those of its main rival and flagship of the industry of the streaming. We have talked at length about how Netflix subscribers fell in the first quarter of the year (200,000 less), which was followed by a sharp drop in the stock market. Although the situation is not critical for the company, which continues to lead in number of subscribers, it has led it to take action.

Netflix has identified two problems: the problem of shared accounts, which it will try to tackle with reduced price accounts for subscribers who use them, and the lack of income, which it will solve with ads in programming. Regardless of what measures the company takes, its dominant role in the sector has led to talk of a “streaming bubble” and a spillover effect that could lead to a similar loss of subscribers on other platforms.

Netflix, you have a problem and it's not the shared accounts or (only) the price: it's the content

Goodbye bubble. This fear of the bubble bursting comes from a general feeling of platform saturation, and also from some specific events in the sector. Added to the drop in Netflix subscribers the closure of Warnermedia’s CNN+ just 32 days after its release. And the success of proposals like Peacock (which has not even finished leaving the United States and will arrive in Europe in 2022 under the umbrella of SkyShowtime) remains to be seen.

Scott Purdy, director of the KPMG consulting network, I analyzed it as follows: “the speculative era of streaming, of spending a lot and at all costs, is over.” He adds: “We are facing a period of no or slow growth that people thought would happen in five years, but it is happening now. Purdy says “there’s no room in the US market for 10 providers to have more than 100 million subscribers,” but the latest Disney+ results may cast some doubt on the matter.

What awaits Disney +. At the moment, growth, although it is not necessary to cast bells on the fly. Disney CFO Christine McCarthy told the meeting that growth was expected to continue for the second half of the fiscal year, but not to the same extent as anticipated. All this translates into earnings of more than 19,000 million dollars for this quarter, an increase of 23%. It is also a little less than what was calculated (around a little more than 20 million)

Part of these benefits are derived, as reported by Disney +, from the recovery of the rights to a large number of series and movies owned by the company, but which continued to be exploited by other platforms. Analysts believe that these series could refer to licenses that Netflix held for Marvel movies in different territories, and also for the Marvel hero series produced by Netflix itself, and that have returned to Disney + definitively in recent months.

"fast and ambitious": Netflix will include ads and cut shared accounts by the end of the year, according to The New York Times

A slipstream of Netflix. Among the goals for the near future is the intention to reach between 230 and 260 million subscribers by the end of fiscal year 2024. That figure includes services that are not outside the United States, such as Hulu and ESPN +, among which sum, added to Disney + 205.6 million, very close to the 221.6 million of Netflix. If Disney continues to grow under your expectations and Netflix continues to decline (or directly, does not grow), 2023 or 2024 will be the year of sorpasso.

Disney + also counts, among its short-term projects, starting its announced plan to include advertising in its programming, with a subscription fee lower than the standard. Although no dates or forms have been given with which this publicity will take shape, it is expected in the United States by the end of this year.

Disney+ continues to ride a currently unstoppable line of upward growth, as communicated to its shareholders in its first quarter…

Disney+ continues to ride a currently unstoppable line of upward growth, as communicated to its shareholders in its first quarter…

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