GENEVA: Netflix lost as much as US$8 billion in market capitalisation in a few minutes of trading on Walt Disney news of its upcoming – and cheaper – rival streaming service.
Disney unveiled details of the service on Thursday after the close, saying it would launch Nov 12 at a price of US$7 a month or US$70 a year. That undercuts Netflix, whose most popular US plan costs about US$11 a month.
Netflix shares fell as much as 5% to US$349.36 shortly after the open in New York Friday, sending its market as low as US$152.5 billion.
Analysts have been sanguine about Netflix’s rising subscription prices, which haven’t seriously dented its 60 million-strong US customer base.
Still, the company has rarely faced a challenge like the deep-pocketed Disney, which is willing to lose money for years on Disney+ as it moves to grab market share.
Disney went the opposite way. Its shares jumped to a record high, adding as much as US$25 billion in market value, for a total of about US$235 billion.
The entertainment giant presented Disney+ on a sound stage used to make the original “Mary Poppins,” delivering an Apple-style presentation of the online product.
The service will live or die based on its content – and that’s where Disney made a big statement. Disney+ will feature an arsenal of kid-friendly programming, including 13 classic animated movies, 21 Pixar features, original series, and material from its Marvel and Star Wars franchises.