Analysts: ‘Netflix more than OK without Disney’

Analysts at investment bank Piper Jaffray have suggested that the end of a distribution deal between Netflix and Disney will not hurt the streaming giant as much as some investors and observers predict.

The bank’s survey of more than 500 current US users of Netflix found that only some 20 per cent spend more than 10 per cent of their time watching Disney titles.

“We, therefore, expect almost none of the remaining 80 per cent of subscribers would consider cancelling due to the loss of Disney,” advised analysts Michel J. Olson and Yung Kim, in a note to clients.

“And, even for the 20% heavier Disney viewers, most are unlikely to cancel unless Disney accounts for a large portion (>40%) of their Netflix viewing time (which another survey we ran showed was <5% of subs),” they added.

“While we recognise the strength of the Disney content, particularly for parents of younger children, [we] believe Netflix can license similar genre content from other sources and/or use the cost savings for original programming,” they remarked.

Netflix closed the day’s trading August 14th at $171.00 [€145.44] (-0.23 per cent), having reached a high of $172.45.

The analyst note came as major producer Shonda Rimes defected from Disney’s ABC Network to Netflix to develop a new slate of shows. Her hits include Grey’s Anatomy and Scandal.

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