Netflix Options Show Prospect for Full Reversal of Disney+ Rout

Disney announced during a presentation for investors on April 11, that the service will launch on November 12 in the United States with a monthly price of $6.99 - which is cheaper than competitors Netflix, Hulu and Amazon.

Options traders expect Netflix shares to swing by about 7% in either direction in the session after its report, which is expected after the market closes on Tuesday.

"What's making investors nervous is that there are signs of a slowdown in the second-quarter subscriber growth", said Haris Anwar, senior analyst at Investing.com. Apple also recently unveiled Apple TV+, its own effort to take a piece of the streaming pie. Of the 9.6 million new paid subscribers, 1.74 million were in the USA and 7.86 million were from around the world; the user growth represented a 16 percent year-over-year increase. Revenues for the quarter topped $4.5bn and the company reported a profit of $344m. "Consumers associate Netflix with streaming".

It was originally a postal DVD rental service but in 2007 it started offering customers the choice to stream films and TV shows online.

Competition is only mounting for the streaming giant.

More than a quarter of Netflix open interest is due to expire in the wake of Tuesday afternoon's first-quarter release, with bullish calls outweighing bearish puts.

Netflix said it is "excited to compete" with its new rivals, adding: "We don't anticipate that these new entrants will materially affect our growth". "We believe we'll all continue to grow as we each invest more in content and improve our service and as consumers continue to migrate away from linear viewing (similar to how USA cable networks collectively grew for years as viewing shifted from broadcast networks during the 1980s and 1990s)".

Disney also announced that all 30 seasons of The Simpsons will be available on Disney+ from day, one and said the first year will include "family-friendly Fox titles" like The Sound of Music, The Princess Bride, and Malcolm in the Middle.

Ted Sarandos, chief content officer at Netflix, said the top 10 most-watched shows on Netflix are all original programs, and only four non-Netflix are in the top 25.

The company burned through $3 billion in 2018 to pay for hit originals such as "Birdbox" and "Ozark". In a three-hour event Thursday, Disney revealed the release date, price, shows, and movies planned for its Netflix competitor. People like Steven Spielberg, J.J. Abrams, Oprah Winfrey, Reese Witherspoon, Jennifer Aniston, Steve Carell, Chris Evans, Jason Momoa, and Octavia Spencer all have projects lined up at Apple.

"We are confident that the combination of our unrivaled storytelling, beloved brands, iconic franchises, and cutting-edge technology will make Disney+ a standout in the marketplace, and deliver significant value for consumers and shareholders alike", said Iger.

  • Jacqueline Ellis