With its deep vaults, Disney takes the fight to Netflix | STREAMED

STREAMED is a regular column covering the people, companies and ideas behind the new media economy, written by Corin Faife and published by Breaker.

UPDATE 10/17: Netflix’s Q3 report, released after publication, was a mixed bag: earnings per share exceeded expectations, while revenue fell slightly short and subscriber goals were missed. In a letter to shareholders, Netflix executives wrote that competitors like Apple and Disney represent a “modest headwind to our near-term growth,” admitting the company faces a robust challenge in the coming months.

For Netflix the next few months will be the calm before the storm: the last period of quiet until the streaming wars truly begin. Tonight marks the last time that the original streaming giant will put out an earnings report before rivals Disney+ and Apple TV+ come onto the market, together costing less than Netflix’s standard subscription package, and mounting a two-pronged attack on the throne.

As noted before here in STREAMED, Apple is more interested in giving users another reason to stay within its product and service ecosystem than it is in out-competing Netflix in the streaming video market. But Disney is a different beast: as an entertainment company it’s fighting the battle on the same territory, and has an immense back catalog by way of ammunition.

This week Disney generated a buzz by tweeting a huge thread listing every movie, documentary and TV series that will be available on Disney+ at launch. Gizmodo pulled all of the titles together into one page and the full collection is enormous, spanning from early classics like Snow White and Bambi all the way up to modern hits like Frozen and the Avengers franchise. (As the Washington Post observed, it was also a reminder of some of the bizarre films Disney made in the 70s and 80s.)

Even before the Disney mega thread, Netflix has been having a tough few months. In its Q2 earnings announcement the company revealed it was adding new subscribers more slowly than expected internationally, and losing subscribers in the US for the first time. Stock prices began to drop accordingly amid concern about incoming competitors, and have fallen more than 20 percent since then. With the Q3 report sure to receive close scrutiny, Disney’s catalog announcement is a calculated flexing of muscles: if Netflix has had a strong third quarter performance, Disney’s spotlight-grabbing move sets up the latter company as a tough rival; if Netflix has done poorly, it could even appear that Disney is in a stronger position.

Still, a big question remains over how much of the video streaming market is a zero sum, either/or game, as opposed to being complementary. A survey by investment bank Piper Jaffray found that the majority of Netflix subscribers don’t plan to sign up for either Apple TV+ or Disney+, and of those that do, most will keep their existing Netflix subscription rather than cancel it. The forthcoming earnings announcement is something to watch for, and stock prices will certainly respond, but in the long term Netflix’s first-mover advantage may still shield it from taking serious damage.

In other news from the streaming world, the uber popular Fortnite had hundreds of thousands of viewers watching a lightly animated black hole on game streaming platform Twitch. While servers rebooted ahead of the launch of the new version, Fortnite Chapter 2, anyone trying to load the game was shown the black placeholder screen — but it didn’t stop 400,000 people tuning in to the channels of popular Fortnite streamers, who either talked over the black hole image or showed re-runs of old games.

It’s yet another proof that game streaming, not just game playing, are a big part of culture now. As Bijan Stephen of The Verge writes:

That a video game can inspire this level of cultural obsession is impressive. But what’s more interesting is that it’s shown how much the creator ecosystem relies on Fortnite as a place to generate content. Even when the game is literally unplayable, it still manages to occupy the top spot on Twitch.

Chapter 2 is now up and running to much excitement so far. But for all the neon colors and cartoon craziness of the gameplay, the black hole had a more illuminating message.