- Netflix is falling after Disney talked about its new streaming service on its earnings call.
- Disney plans to price its streaming service lower than Netflix.
- Netflix is going after new, original content to keep its customers from jumping ship.
- Watch Netflix’s stock price move in real time
Netflix’s stock was down 2.07% at $US189.89 a share on Friday after Disney CEO Bob Iger reiterated to investors that his company’s soon-to-be streaming service will be priced on the low end in order to compete with Netflix.
“That is in part reflective of the fact that it will have substantially less volume,” Iger said on the company’s earnings call. “It will have a lot of high quality because of the brands and the franchises that will be on it that we’ve talked about. But it will simply launch with less volume, and the price will reflect that.”
Netflix shares have a tendency to slide every time Disney talks publicly about its new service, which is expected to start in 2019 when Netflix’s contract for Disney content runs out. Netflix shares were down following Disney’s initial announcement of a new streaming service, and down again when the company originally announced its lower price point.
Netflix isn’t sitting still. The company bought up comic book company Millar World and poached Shonda Rhimes away from ABC in order to provide a boost to its original content offerings.
Disney is reportedly in talks to acquire parts of 21st Century Fox, which it could use to add breadth to its streaming service. The company bought a majority stake in BAMtech for $US1.58 billion in order to build out the technology for its new services.
Netflix is up 48.92% this year.