Netflix CEO Reed Hastings has spoken out about the Disney+ reveal, saying that he and his company are "excited to compete."
Disney probably dealt a harsh blow to Netflix last week with the announcement of Disney+, its new streaming service. It comes at a cheaper subscription price to Netflix, and will include some must-see content when it goes live in November. Hastings addressed the announcement on Tuesday in a letter to shareholders, saying that Netflix is up for taking on all its new challengers, according to The Hollywood Reporter.
In his letter, Hastings wrote that Netflix is "excited to compete with Disney+, as well as the new streaming apps coming from Apple, NBCUniversal and WarnerMedia.
"We don't anticipate that these new entrants will materially affect our growth because the transition from linear to on demand entertainment is so massive," he wrote.
Hastings added that he is not worried about how these proprietary services will reduce the amount of licensed material Netflix can buy, since the company has already been pushing its original shows and movies so hard. It has been paying off as well, as all 10 of its "most-watched" shows are "Netflix original brands," the company announced on Tuesday.
"We're eager to have more and more of our money for spectacular new titles," Hastings wrote.
Hastings compared the coming competitions between streaming services with the battles between network TV and cable channels in the 1980s and 1990s. He pointed out optimistically that in the U.S., Netflix only accounts for 10-percent of total TV usage, and this could be room to grow. However, in terms of streaming services Netflix reportedly makes up 77 percent of the market, and some analysts suggest it could slow growth. Others say that Netflix has already become indispensable to American life, and it is not likely to change even when new offers pop up.
Eric Haggstrom of eMarketer told reporters that Netflix is a "must-have" service in the U.S., and that "price increases and market saturation will cause U.S. subscriber growth to slow moving forward." Haggstrom was not even worried about Netflix's recent price hikes, which look bad compared to the substantially cheaper competition.
In January, Netflix announced price hikes which just went into effect recently. They raised the price of the most basic package by one dollar, and the two higher tiers by two dollars. Subscribers grumbled about this online, especially fans of shows that were slashed in the streaming services recent cancellations.0comments
By contrast, Netflix's current competitor, Hulu, dropped its basic plan to a mere $5.99 per month at the same time -- a two dollar reduction. The service did raise its top-tier services to compensate, but these include streaming live TV, and so are not as directly correlated to Netflix's services. Besides, Hulu is still a cheaper option than most cable subscriptions.
Disney, too, is attempting to undercut Netflix at $6.99 per month. The new streaming service will be available starting on Nov. 12, 2019.