We compared Netflix's top assets to new rivals like Disney Plus and HBO Max as the streaming battle heats up

Business Insider Entertainment 2 months ago

The streaming war is getting intense, as legacy media giants drop tons of money on valuable properties to fuel their own new platforms.

Netflix will lose "The Office" and "Friends" within the next two years to upcoming competitors, NBCUniversal's Peacock and WarnerMedia's HBO Max, respectively. The two hit sitcoms were the streaming giant's most popular shows last year, according to data from analytics company, Jumpshot. "Parks and Recreation," the third most popular, will also move from Netflix to Peacock next October.

But Netflix gained another popular sitcom in "Seinfeld" this week in a five-year global deal that begins in 2021. The deal is worth more than the $425 million WarnerMedia paid for "Friends" and the $500 million NBCU paid for "The Office," according to The Los Angeles Times.

"They're all big enough shows to say they're worth millions of dollars," Michael Pachter, a media analyst with investment firm Wedbush Securities and notable Netflix bear, told Business Insider.

Pachter said Netflix is justified in spending as much as it is on "Seinfeld." But it also highlights the huge gap that Netflix is looking to fill after it loses three of its biggest shows.

Disney content is among that. The company, which is launching its streaming service Disney Plus on November 12, ended a licensing deal with Netflix this year and its theatrical releases, starting with "Captain Marvel," will eventually appear on Disney Plus.

"You have to be bullish about the assets that they have assembled and how they are approaching breaking in in terms of the low price point [$6.99 a month]," Stephen Beck, the founder and managing partner of management consultancy cg42, said of Disney.

We rounded up the biggest assets for Netflix, Disney Plus, HBO Max, and Peacock to give subscribers and investors a better idea of where each service stands:

Netflix — most popular subscription plan (standard HD) is $12.99

Netflix — most popular subscription plan (standard HD) is $12.99
"Stranger Things"

Netflix's advantage in the streaming war is that it's the incumbent player, Beck told Business Insider.

"Netflix has over 150 million subs worldwide," Beck said. "Obviously it has demonstrated their ability to grow a subscriber base and it can create popular shows."

Netflix spent $12 billion on content in 2018 and is expected to spend up to $15 billion this year. It has cemented exclusive mega deals with superstar producers like Ryan Murphy and Shonda Rhimes worth hundreds of millions of dollars. But as it loses licensed content, Beck said that makes the streaming giant vulnerable.

"Its originals investment is robust," Beck said. "But its success has been primarily driven by the content of others ... Do I think that the 'Seinfeld' catalog is more valuable than a relationship with a producer? Yes."

Aside from "Seinfeld" and the Murphy/Rhimes deals, Netflix's major properties include:

  • The third season of its hit sci-fi series "Stranger Things" debuted in July to the best four-day debut of any Netflix original series.
  • Its comedy lineup is essential, primarily a deal with Adam Sandler worth millions. The streamer renewed a four-movie deal with the actor in 2017, and his latest Netflix movie, "Murder Mystery," was viewed by 73 million households in its first month of release.
  • Netflix struck a multiyear deal last year with former President Barack Obama and former First Lady Michelle Obama and their production company Higher Ground. The first project out of this deal, the documentary "American Factory," debuted last month.

Disney Plus — launches November 12 for $6.99 a month

Disney Plus — launches November 12 for $6.99 a month
"The Mandalorian"

Disney Plus launches November 12 at a competitive price point and Disney's many wildly popular assets make it a formidable player against Netflix.

  • Despite "Solo" disappointing at the box office last year, Disney's focus on "Star Wars" content for Disney Plus shows that it's not worried about potential fan fatigue. "The Mandalorian," the first "Star Wars" live-action series, will be available to stream at launch. A "Rogue One" prequel, a new season of the animated "Star Wars: The Clone Wars," and an Obi-Wan Kenobi series starring Ewan McGregor are also in development for Disney Plus. The service will also include every movie in the "Star Wars" saga, including the original trilogy.
  • Disney is developing original TV series spinning out of the Marvel Cinematic Universe for Disney Plus. With $22.5 billion worldwide across 23 movies, the MCU is the biggest movie franchise ever and Disney will try to capitalize on that success in a different format. The TV shows in the works include "The Falcon and the Winter Soldier," "WandaVision," the animated What If?," "Hawkeye," "Loki," "Ms. Marvel," "Moon Knight," and "She-Hulk."
  • Disney Plus will include Pixar theatrical releases as well as original content, including a "Monsters Inc." series, "Monsters At Work."
  • Disney Plus will include every classic Disney animated movie at launch.

HBO Max — launches spring 2020 (price not yet announced)

HBO Max — launches spring 2020 (price not yet announced)

WarnerMedia not only paid millions for "Friends," but dropped "billions of dollars" on "The Big Bang Theory," according to The Hollywood Reporter, which includes both streaming and syndication. But like Netflix's "Seinfeld" deal, Pachter said this will be worth it.

"If they give [subscribers] a lot of stuff — 'Friends,' 'Big Bang Theory,' every Warner Bros. movie — I might pay an extra few bucks for that, especially if I'm already an HBO customer," Pachter said. "They have potential to get that money back."

WarnerMedia has yet to announce how much HBO Max will cost, but the company is considering a $14.99 monthly price (the same as a normal HBO subscription), according to NBC News.

Aside from "Friends" and "The Big Bang Theory," here are more essential properties that will be available on HBO Max:

Peacock — launches April 2020 (price not yet announced)

Peacock — launches April 2020 (price not yet announced)
"The Office"

Peacock, NBCUniversal's streaming service that will launch in April, will include 15,000 hours of content compared to HBO Max's 10,000 hours. But of the streaming newcomers, Beck said he is the "least bullish" on Peacock's prospects in the streaming war.

"They don't have as many assets to leverage and it will have to overcome that," Beck said.

Peacock will be the exclusive home of "The Office" and "Parks and Recreation" once they leave Netflix in January 2021 and next October, respectively. Those are strong assets, as they are two of Netflix's most popular shows, but the rest of the Peacock library is lacking compared to the competition, Beck said.

  • A new "Battlestar Galactica" series is in the works for Peacock from the "Mr. Robot" creator Sam Esmail.
  • A "Saved by the Bell" reboot is in the works.
  • Peacock will include Universal movies, such as the "Jurassic World" and "Fast and Furious" franchises, as well as Dreamworks animated movies like "Despicable Me" and exclusive originals ("it's no Pixar," Beck said).

Disney Plus leads the way in original content for new streaming services, according to a study from Ampere Analysis.

Disney Plus leads the way in original content for new streaming services, according to a study from Ampere Analysis.
Ampere Analysis

In a report released on Tuesday, Ampere Analysis looked at the new players in the streaming war and how they compare in original content. Disney leads with 47 original TV shows and 13 movies in the works for Disney Plus, according to Ampere.

HBO Max has 18 original TV shows in the works and Peacock has just four, according to the analysis. Ampere said that it expects Peacock to be "mainly catalog-focused."

Ampere said HBO Max leads the way in female-led content at 43%, while "Disney Plus' focus on spin-offs and reboots from older titles has left it with a more male-centric set of commissions."

"Several of the services are setting out to target specific audiences. Disney Plus is focused particularly on family content, with nothing higher than a 13-years age rating, with more mature content left to the bundle-able platforms Hulu and ESPN Plus," Fred Black, an Ampere Analysis analyst, said in the report.

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