Netflix says it doesn't expect Apple TV+ or Disney+ to 'materially affect' income

AppleInsider · April 16, 2019 9:45PM

Netflix on Tuesday said that it doesn't see much threat from two upcoming competitors, Apple TV+ and Disney+, each launching towards the end of 2019.

Netflix and Marvel's 'The Punisher,' now dead because of Disney+.

"Both companies are world class consumer brands and we're excited to compete," Netflix wrote in a first-quarter earnings report, highlighting revenues up 22.2 percent year-over-year at $4.5 billion. Studios and viewers, it said, will "reap the rewards of many companies vying to provide a great video experience for audiences."

Neither of the new rivals will "materially affect our growth," Netflix added. The on-demand market has room for multiple companies, it argued, and Netflix's content is sufficiently unique.

Netflix was the first to popularize on-demand video streaming and is now available in over 190 countries, the only major exception being China. Many of its TV shows have become cultural institutions.

Disney+, launching Nov. 12, will cost just $6.99 per month or $69.99 per year, with titles from the likes of Marvel, Pixar and Lucasfilm. At least some of these are disappearing from the Netflix catalog or were never there in the first place -- to the anger of fans, Disney+ has also resulted in the cancellation of Marvel Netflix shows like "Daredevil" and "The Punisher."

Apple TV+ is due sometime this fall. Many details are still under wraps, but Apple is counting on a barrage of original shows with creators like Steven Spielberg, J.J. Abrams, and Oprah Winfrey. It's unclear what if any licensed material will be available.

mlprice · April 16, 2019 9:54PM

Interestingly enough, Apple entering this space has caused me to cancel just about everything I had except Netflix, and the new DC comics. I canceled HBO, HULU, YoutubeTV, and I will cancel CBS after the finale of Star Trek this week. All of these services combined are too much money. I can wait for Game of Thrones to finish, then I will purchase it on iTunes and have more fun bingeing it. I see nothing interesting in Apple's offering yet. they are going to have to get to a model where I can purchase a show for download for $40 or something like iTunes. This $14 and $15 a month crap isn't going to work.

mcdave · April 16, 2019 10:34PM

Because it doesn’t have much material income to affect?

hmurchison · April 16, 2019 10:34PM

mlprice said:

Interestingly enough, Apple entering this space has caused me to cancel just about everything I had except Netflix, and the new DC comics. I canceled HBO, HULU, YoutubeTV, and I will cancel CBS after the finale of Star Trek this week. All of these services combined are too much money. I can wait for Game of Thrones to finish, then I will purchase it on iTunes and have more fun bingeing it. I see nothing interesting in Apple's offering yet. they are going to have to get to a model where I can purchase a show for download for $40 or something like iTunes. This $14 and $15 a month crap isn't going to work.

I'm thinking along similar lines. I didn't have to sub to Showtime to watch Billions ....I just waited until iTunes made me an offer I couldn't refuse. The great shows are going to end up being easier to access. Disney Plus is a go. That's getting purchased for the annual price. Our home has been rock solid Netflix but after the next Ozarks season I'm not sure there's enough great content that is going to be worth 16 dollars a month every month. We'll see.

Frankly I don't want to sit in front of a TV all day because I've got such great access to shows.

osmartormenajr · April 16, 2019 10:41PM

I for one, am waiting for a better bang for my buck. I wouldn’t consider Netflix expensive, by any standard, but its library is meager in markets outside the US. I also don’t see much point in subscribing to multiple streaming services. So the better one, in my case, will be “the one”.

fastasleep · April 17, 2019 12:43AM

mcdave said:

Because it doesn’t have much material income to affect?

$4.5 billion per quarter isn't "much" to you?

edited April 2019

matrix077 · April 17, 2019 1:36AM

mlprice said:

Interestingly enough, Apple entering this space has caused me to cancel just about everything I had except Netflix, and the new DC comics. I canceled HBO, HULU, YoutubeTV, and I will cancel CBS after the finale of Star Trek this week. All of these services combined are too much money. I can wait for Game of Thrones to finish, then I will purchase it on iTunes and have more fun bingeing it. I see nothing interesting in Apple's offering yet. they are going to have to get to a model where I can purchase a show for download for $40 or something like iTunes. This $14 and $15 a month crap isn't going to work.

For video, i subscribed to only Netflix and after Apple announced TV+ I have cancelled the subscription. Who knows if I will subscribe to TV+ or not but as many programs as Netflix have, not many are quality. For households that has no kids Netflix is the easiest choice to get rid of, but then again if you have kids Disney+ is a much better choice.
The first one I subscribe after cancelling Netflix is Criterion Channel and will look if I could subscribe to HBO on new TV app.

edited April 2019

brisance · April 17, 2019 2:15AM

fastasleep said:

mcdave said:

Because it doesn’t have much material income to affect?

$4.5 billion per quarter isn't "much" to you?

That $4.5 billion is revenue, not income.

flydog · April 17, 2019 2:45AM

mcdave said:

Because it doesn’t have much material income to affect?

What you posted makes no sense.

flydog · April 17, 2019 2:49AM

brisance said:

fastasleep said:

mcdave said:

Because it doesn’t have much material income to affect?

$4.5 billion per quarter isn't "much" to you?

That $4.5 billion is revenue, not income.

Income and revenue are synonymous. If you want to be technically precise, in business accounting gross revenue is all income derived from operations and net income is gross revenues minus expenses, etc. Regardless, the quip that Netflix has no income to affect is nonsense because losing sales affects both gross revenue and net income.

btonedem · April 17, 2019 4:09AM

Blockbuster said the same.

coolfactor · April 17, 2019 4:15AM

Netflix finances some great content, so they'll continue to do just fine. And consumers don't want to be subscribing to multiple "channels" each month. They want one "as-much-as-you-can-eat" source, and Netflix is that, for now.

davidmalcolm · April 17, 2019 6:07AM

Honestly Netflix doesn't have that much in the way of fantastic content anymore. Their Marvel shows (aside from Iron Fist) were great. But the last few "originals" I watched were pretty meh. They were pushing that "The Order" show for a while and I tried to watch it but the writing is just SO BAD. I feel like A lot of execs at Netflix think that the best way to get people interested in a show is to have the first scene involve a topless girl bouncing up and down on a guy as the first scene and I am SOOOO UTTERY BORED WITH FLAPPING BOOBS! Seriously, film makers need to find a new short hand for "this is going to be faux-edgy".

Netflix has some cool cartoons (Dragon Prince) and I'm looking forward to the next season of Dear White People. But I'm seriously having a hard time thinking of a good reason to pay for Netflix (thankfully I don't, my sister does and I mooch her login). Oh, Umbrella Academy was fantastic.

celtan · April 17, 2019 6:49AM

Hmmm. What else can Netflix say?
”oh my god we will lose 15% of our subscription base” would not send a good message to shareholders.

Of course they will say “no problem, we good” until they aren’t.

trashman69 · April 17, 2019 7:10AM

I just can’t see Apple TV+ being able to compete with Disney or Netflix.

Oprah’s metoo documentary just....I just don’t see it being any good. Perhaps if she did
the documentary in a car and sang karaoke with Alyssa Milano while creating an App for Will-I-Am....

Anyway - I digress.

The scene on stage when Tim Cook rubbed the Feux Tear with oprah - was just too much for me. It reminded me
of when Apple still thought U2 was relevant - and forcefully gave everyone their new album.

Im still Digressing.

I think Buffett was right to say he thinks this was probably a mistake. So unfortunate.

strangedays · April 17, 2019 8:37PM

Netflix isn’t worried, they’ll just raises their prices again.

fastasleep · April 17, 2019 8:58PM

brisance said:

fastasleep said:

mcdave said:

Because it doesn’t have much material income to affect?

$4.5 billion per quarter isn't "much" to you?

That $4.5 billion is revenue, not income.

Cool. So you’re saying their gross revenue doesn’t affect their net income? Also, the actual quote was "materially affect our growth," which isn’t either of those things anyway, so yay for being pedantic.

brisance · April 18, 2019 1:17AM

flydog said:

Income and revenue are synonymous. If you want to be technically precise, in business accounting gross revenue is all income derived from operations and net income is gross revenues minus expenses, etc. Regardless, the quip that Netflix has no income to affect is nonsense because losing sales affects both gross revenue and net income.

No, they're not. If they're synonymous, they would not appear as separate line items in an income statement.

brisance · April 18, 2019 1:24AM

fastasleep said:
Cool. So you’re saying their gross revenue doesn’t affect their net income? Also, the actual quote was "materially affect our growth," which isn’t either of those things anyway, so yay for being pedantic.

If we're pedantic then why did you edit your post? $4.5B is a decent amount of revenue, but it's not gross profit/EBITDA. mcdave was implying that it's a drop in the bucket compared to gigacorps like Disney and Apple, which is true. Apple makes about $1B in profit per week during 4Q each year.

fastasleep · April 18, 2019 1:35AM

brisance said:

fastasleep said:
Cool. So you’re saying their gross revenue doesn’t affect their net income? Also, the actual quote was "materially affect our growth," which isn’t either of those things anyway, so yay for being pedantic.

If we're pedantic then why did you edit your post? $4.5B is a decent amount of revenue, but it's not gross profit/EBITDA. mcdave was implying that it's a drop in the bucket compared to gigacorps like Disney and Apple, which is true. Apple makes about $1B in profit per week during 4Q each year.

I edited it to add "per quarter" for clarification. As far as "pedantic" goes, I was making light of the argument over income vs revenue when neither of those words were from the original quote anyway.

Netflix says it doesn't expect Apple TV+ or Disney+ to 'materially affect' income

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