In a rather amazing turn of events, Netflix is now worth more than Disney, at least for the time being. In recent weeks, the stock market has been somewhat volatile, given what’s going on in the world. In particular, companies involved in the entertainment industry have been affected in a big way, with people stuck at home practicing social distancing. That scenario has seriously benefited streaming services like Netflix, while Disney’s business has been hit in brutal fashion. The stock market has responded accordingly.
According to a new report, Netflix stock recently peaked at $430 per share. That brings its overall market capitalization to nearly $188 billion. At present, Disney’s market cap is just below that at $186.6 billion. These numbers are fluctuating daily and these numbers represent what the market says as of this writing. Be that as it may, the trend is telling and opens up a larger discussion about the future of the industry, which will undoubtedly be dominated by streaming. That was a forgone conclusion even before the current events began unfolding, but now it’s truly an inarguable fact of the matter.
Disney recognized this and launched its own streaming service, Disney+, last year. That has proved to be a successful venture, as the service recently passed 50 million subscribers worldwide. That said, it still pales in comparison to Netflix, which has nearly 170 million subscribers worldwide, with analysts expecting the company will add more than 7 million new subscribers in the first quarter of 2020. Since streaming has exploded during the quarantine, Netflix and Disney+ have both seen impressive increases in user activity.
The problem for Disney is that streaming is a relatively small part of its overall business, even when taking ESPN+ and Hulu into account. The bigger sections of Disney’s operation are its theme parks and movie business. Disneyland and Disney World are both closed right now and they won’t be opening their doors again anytime soon. Movie theaters around the world are also closed and, at very best, we could be looking at them opening again toward the end of July, but it’s expected that it will take a long time before we see moviegoers returning to theaters in mass as they did before. It’s also possible, on the extreme end of the spectrum, that theaters may never again see the same levels of traffic as they once did.
Point being, Disney is still one of the biggest media empires in the world, but they are bleeding cash, to the tune of $30 million per day right now. On the flipside, Netflix is purely a streaming service with a massive library of content that doesn’t rely on theatrical releases to generate revenue. That makes them uniquely qualified to thrive in this environment, whereas Disney is going to have to make some major adjustments to keep things going in the long term. This news comes to us via Variety.