Disney+ Lured 1 Million Subscribers From Netflix, Analyst Estimates

Cowen & Co. analyst John Blackledge expects Netflix to hit its fourth-quarter subscriber forecasts despite the increased competition.

A new analyst report suggests that Netflix lost 1.1 million subscribers to Disney+ during the month of November.

Cowen & Co. estimates that the streaming giant could see churn of around 1.6 million total subscribers during the fourth quarter of 2019, a period during which both Disney+ and Apple TV+ launched. That doesn't necessarily mean that Netflix will see a loss in subscribers during the period, however, since the company will add new members even as existing ones leave the service. In fact, Cowen & Co. analyst John Blackledge notes in the report that the firm still expects Netflix to hit or exceed its fourth-quarter forecast of 7.6 million subscriber additions.

Disney launched the streamer Disney+ on Nov. 12 in select markets, including the U.S., and plans to roll the service out more widely around the world over the coming months. The family-friendly offering adds more competition to a streaming market that Netflix has long dominated. Still, CEO Reed Hastings has said he doesn't view the increased options for consumers as bad for Netflix's business. On the company's third-quarter earnings call, Hastings noted that Netflix has been competing with Hulu, Amazon and YouTube for several years. "So, fundamentally, there is not a big change here," he said, adding, "(A)ll of us are competing with linear TV and we're all relatively small to linear TV."

To study the impact of Disney+ on Netflix's subscriber base, Cowen & Co. polled 2,500 U.S. consumers. Of those surveyed, 21 percent said they had signed up for Disney+, indicating that the service had amassed 24 million U.S. subscribers in November. The study also revealed that 19.4 million respondents were dual subscribers, indicating that there was an 80 percent overlap between the services' customer bases.

Further, per the note, the survey suggested that 5.8 percent of Netflix members canceled their subscriptions after signing up for Disney+. Of the estimated churn, Blackledge wrote, "assuming a portion wouldn't churned regardless of [Disney+'s] launch; incremental churn appears manageable."

Many media observers believe that there is room for several competing services in the marketplace. Disney+, which is focused on the Bob Iger-led company's core brands and includes originals like The Mandalorian, costs $7 per month. According to Disney, the service had 10 million signups in its first day. Netflix, meanwhile, has 60.6 million subscribers in the U.S. and 158 million subscribers globally. It expects those numbers to grow to 61.2 million and 166 million, respectively, by the end of the year.