Coronavirus: Netflix overtakes Disney as streaming services surge
The streaming service Netflix recorded an all-time share-price high on Wednesday as the coronavirus-enforced lockdown leaves people stuck on their sofas.
A three-day surge in stock trading saw Netflix’s total market capitalisation reach $187.3 billion as the stock ended Wednesday at $426.75, up 3.2% for the day. The market’s broader decline was felt by Disney, who suffered a 2.5% fall in value.
Disney’s total market capitalisation dipped to $186.6 billion and less than that of Netflix’s for the first time.
Netflix enjoys isolation boom
Netflix was able to buck the general trend thanks to its ability to benefit from the ongoing policy of social isolation that many governments worldwide are encouraging. There has been a sharp upturn in streaming figures during in recent weeks with the US, one of Netflix’s largest markets, recording a huge rise.
Data from Nielsen, a global consumer analytics company, revealed that in the US the viewing of internet video through televisions was up 109% for March 2020 when compared to the same month in 2019.
With a captive audience, Netflix shows like Tiger King and Money Heist have become viral sensations as viewers look to stay up to date with the newest programmes. The newly-released third season of Ozark, created by and starring Jason Bateman, also returned from a near two-year hiatus and has received rave reviews.
President Donald Trump is eager to reopen American society as soon as possible, but with Covid-19 testing kits in short supply that may not be possible anytime soon. In the UK, ministers are warning that the government currently has no immediate plans to end the lockdown.
Disney trail in Netflix’s wake
Despite being one of the most iconic names in entertainment, their global reach has not protected The Walt Disney Company from the economic downturn. The company’s theme parks and cruise lines sit empty, while the closing of cinemas has hit one of their most reliable revenue streams. They also own a majority stake in sports channel ESPN, who will be without any live matches for the foreseeable future.
However, those at Disney will be very relieved that the company launched their new streaming service, Disney+, in November of last year. Although still in its infancy, it has helped them compete for the newly-homebound audience.
Five months after the platform’s launch, they have already secured 50 million paid subscribers worldwide. Expansion into European countries (the UK, Ireland, Germany, Italy, Spain, Austria, France and Switzerland) and India has helped boost the numbers in recent weeks. Within the first week of Disney+ becoming available in India, the country accounted for eight million subscribers.
Disney chairman Bob Iger spoke about this being a game-changing event for the entertainment industry and one that will change Disney’s focus for years to come: “I don’t think we’re ever going to see a return to business as usual,” he said. “I can’t speak for all companies, but Disney will take this opportunity to look for ways to run our businesses more efficiently when we come back”.