Be afraid of Disney Plus. Be very afraid.
That was the essential takeaway from Marc Randolph, the co-founder and former CEO of Netflix, who told Fox Business Tuesday that rival streaming services should be “scared” of the Disney subscription services “impressive" growth.
“I’m really impressed with what Disney has done so far. I mean, what are they, 16 months in, and they've just exceeded 100 million subscribers,” Randolph said. “It's extremely impressive. And even more impressive is the velocity. At their investor day, which was not too long ago, they had 86 million. So 14 million subscribers. It took Netflix 10 years to get their first 14 million subscribers. And Disney's done it in just over two months.
In February, Disney revealed that it has around 146 million subscribers when totals for ESPN Plus and Hulu are cumed with Disney Plus. This elicited talk about Disney being the one true rival to Netflix—the only company that’s in “shouting distance” to the 200 million-plus scale of the No. 1 subscription service.
For his part, Randolph believes Disney Plus still has a long way to go to catch Netflix, impressive start or no.
“The one big difference, of course, is that approximately a third of Disney subscribers are in a single country,” Randolph said. “It's the Hot Star in India. And even if you look out at where the forecast goes three years from now, they show that Disney is going to be larger than Netflix in one country, India. But Netflix will still be larger than India in another 195 countries. So this is not quite the way it sounds in the report. And of course, fundamentally, the most important thing that Disney has to do is demonstrate that they can make money from their subscribers. You know, as we've mentioned before, that right now about a $4 average revenue per user and Netflix is just about $10. It'll take a while for them to bring those numbers up.”
Randolph was Netflix’s first CEO when it launched in 1998 as a DVD-rental-by-mail startup. He ceded the chief executive post to Reed Hastings in 1999 and turned his attention to product development.
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