Competition in the video streaming sector is heating up, with Disney unveiling Thursday its plans to enter the space — but one analyst said the entertainment giant has a "major advantage" over the likes of incumbents like Netflix.

"It's called back catalog," said Mark Mahaney, lead technology analyst at RBC Capital Markets, referring to past content the company may have previously produced.

To illustrate his point, Mahaney cited Disney's expenditure plans of "spending a billion dollars on original content each year." In comparison, "Netflix is going to be spending seven or eight times that much," he told CNBC's "Street Signs" on Friday.

That's because Netflix lacks a portfolio of content, leaving the company in the position of needing to rent content that could be gone if its partners decide to end their relationship, Mahaney said. One such instance was in 2017, when Disney announced its intention to remove its movies from Netflix to develop its own streaming service instead.

In fact, licensed content on Netflix has done better, compared to the viewership that its original shows have attracted, said a Variety report in December that cited data from 7Park Data — a company tracking on-demand video consumption on streaming giants Netflix, Hulu and Amazon.