Disney vs Netflix: who will win in Southeast Asia?

Would you rather be at the “Most magical place on earth” or stay home for some “Netflix and chill”? But it seems that the “most magical place on earth” also wants to chill with you…

Everyone knows the euphemism “Netflix and chill”. Netflix is an American content streaming platform founded in 1997 and IPO’ed in 2002. The founder, Reed Hastings, has become kind of tech celebrity after the Netflix culture deck went into the public domain, and the recent publication of the book No Rules Rules, which he co-authored with INSEAD professor Erin Meyer.  

As of October 2020, Netflix has had over 195 million paid subscriptions worldwide, including 73 million in the United States.

Disney+ is also a subscription video on-demand streaming service that only debuted on November 12, 2019. Despite that only being after a year into its launch, on December 10 2020, Disney announced that the number of subscribers on Disney+ had surpassed 86 million. They also announced that they are planning to create even more Star Wars and Marvel content on Disney+.

Rumours that Disney+ would make Southeast Asia a major market started circulating around that time too. Disney+ Hotstar was launched in September 2020 in Indonesia, in partnership with the country’s largest telco Telkom. Netflix was already in the country, but only available to credit card users (less than 3% of the population), and was once blocked by Telkom. 

Disney+ is also launching in Malaysia soon, home of the now demised regional streaming platform iflix. 

Netflix and Disney weren’t always direct competitors, in fact they had a good relationship in the past. Lucrative licensing agreement, Marvel spins offs and even the renewer of Clone Wars for a final season in 2014. It seemed like a perfect match, but with the impending launch of Disney+, Disney began to pull its content off of Netflix. Its five Marvel superhero shows were abruptly cancelled in early 2019.

The partnership between the two was clearly an opportunistic grab for Disney to test the water and gain the knowledge they needed to launch their own streaming service to systematically disrupt Netflix’s hold on the market to add one more revenue stream to the already vast Disney kingdom. (Pun intended)

The question remains why Disney, an already multi billion dollar company, with the vast amount of popular intellectual properties and producer of record breaking box office movies year after year, would want a piece of streaming service pie?

The answer, they are looking into the long term. Movies and television consumption are slowly dying and probably obsolete in another 10 years. Furthermore, Disney has to work with 3rd party media to host their movies and shows; i.e., cable companies and movie theaters.

Yes, you would want direct access to consumers similar to a food delivery platform, so that in future you will not be relegated to just a cloud kitchen. This is especially for a media empire like Disney which owns so many good IPs. 

Not to mention with COVID-19 speeding up the public’s digital media consumption, movie theatres are no longer viable and cable TV subscriptions have been severely impacted with the economy.

Since the start of the pandemic, the number one streaming service that has seen the most growth is Disney+. In their first year they accumulated 73 million subscribers, which surpassed their initial 5 year subscriber goals in just 8 months. As compared to Netflix which took 9 years to get a similar amount of subscribers.

Ultimately Disney is adapting to the times and seizing the opportunity to have full control of its distribution.

Disney has proven again and again that they can invent themselves to adapt to the ever-changing world. In Indonesia, where Disney+ is going aggressively, they are charging much cheaper compared to Netflix to win customers. Disney+ new investor base probably has that patience for growth rather than upfront profits. 

Netflix Per month	Disney+ HotStar Telkomsel based	Disney+ Non Telkomsel based
Paket Mobile Rp 54.000 ($3.85 USD)	1 month Rp 20.000 ($1.42 USD)	Monthly  Rp 39.000 ($2.78 USD)
Paket Basic Rp 120.000  ($8.55 USD)	3 months Rp 49.000 ($3.49 USD)	Annually RP 199.000 ($14.18 USD)
Paket Standard (HD) Rp 139.000 ($9.90 USD)	6 months Rp 79.000 ($5.63 USD)
Paket Premium (Ultra HD) Rp 169.000 ($12.04 USD)	12 bulan Rp 139.000 ($9.90 USD)

Table: Streaming services prices in Indonesia

However, we should not discount the massive amount of data that Netflix has accumulated and years of experience of understanding streaming customers’ behaviour. 

Both companies are great innovation powerhouses and attracting the best creative talent in the industry. The history of this battle is still being written. 

Now where is HBO?