Netflix executives have offered some of their most extensive comments to date on Disney’s intensive streaming efforts during the fourth quarter earnings interview.
They spoke during the company’s video interview about earnings, moderated by a single Wall Street analyst and posted on YouTube, after the company reported strong financial results in the fourth quarter. Despite growing competition, Netflix added 8.5 million subscribers in the period and 37 million in 2020, well ahead of forecasts. That leads to 203.7 million, well ahead of Disney + 86.8 million, but even so, executives were a little more open than normal when they saw mouse ears in the rear view mirror.
“It is super impressive what Disney has done,” said founder and co-CEO Reed Hastings. “It is an incredible execution for a pivotal holder … this is great. And it shows that members are interested and willing to pay more for more content because they are hungry for great stories. And Disney has great stories ”.
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Within the company, he continued, “This makes us excited about increasing our membership, increasing our content budget and it will be great for the world that Disney and Netflix are competing show by show, movie by movie. We are very excited to catch them in family animation – perhaps eventually overtaking them, we will see, a long way to go just to catch them – and maintaining our leadership in general entertainment that is so exciting. ” One example, he added, is that created by Shonda Rhimes Bridgerton, “Which I don’t think you’ll see at Disney anytime soon.”
Hastings ‘reference to Rhimes’ breakup has had a little more mustard since Rhimes moved from Disney-owned ABC, his home to Grey’s Anatomy and other series, to sign a successful deal on Netflix. The program appears to be on the verge of renewal and was reportedly watched by 63 million families in its first 28 days, ranking as the 5th original series release of all time on Netflix.
Moderator Kannan Venkateshwar, an analyst at Barclays, got constant reactions from four of the five executives who participated in the earnings interview when asked about Disney. The nature of the answer had a lot to do with the way he asked the question. “It almost seems that Netflix is losing performance in relation to its potential and has to work much harder to reach a comparable scale,” said the analyst. “Is there any reason why Disney numbers are not a reference for Netflix and why the company can’t get there?”
Founder and co-CEO Reed Hastings, while smiling, repeated the word “underachieving” with false amazement and displayed some of his backbone as a well-developed technology founder. He figuratively pointed to the scoreboard, noting the 40% annual rate of return for Netflix shareholders since the company went public in 2002. “If this is underperforming, we will do more than that,” he said with a smile. keyed up.
“When you talk about it in competitive terms, you think about Christmas Day 2020,” said co-CEO Ted Sarandos of the streaming landscape. On the holiday, due to the closing of the Covid-19 theater, Wonder Woman 1984 and Soul debuted on streaming services HBO Max and Disney +, respectively, with WW84 also receiving a small amount of screening in theaters. Watching both was healthy, in addition to Netflix’s heavy consumption during the holiday, said Sarandos, proving that customers supplementing Netflix with extra subscriptions is a “super healthy dynamic”.
Spencer Wang, who heads investor relations and also participates in quarterly earnings interviews, added his own perspective. “Not wanting to take anything away from what Disney has done, because it has been incredible and I am also a happy customer, but 30% of its 87 million subscribers were Hotstar (in India), which I think we all recognize is a different service” , he said. He emphasized Netflix’s other competitive advantages, including its greater global penetration and revenue per user that is more than double that of Disney, based on recent quarterly figures.
Interrupting with a chatty laugh, Sarandos teased Wang as a way to diplomatically redirect the conversation. Along with COO and product director Greg Peters, who also looked at the “virtuous cycle” created by Netflix’s recipe, Wang started off remarkably from Hastings’ “super impressive” start to the Disney interview part. “You took the bait!” the co-CEO scolded. “Kannan was trying to make us hit his chest a little more.”
Before the interview, it was impressive to see the company’s position on rival services in its quarterly letter to shareholders. Historically, the document made malicious references to Netflix’s main competitors being the video game Fifteen days or even sleep. This time, he recognized media competitors by name and even accentuated Disney’s progress with an exclamation point. “It is a great time to be an entertainment consumer,” praises the letter.