(BFM Bourse) – The two American entertainment giants disappointed the market at the start of 2021, failing – and this is rare – to reach the number of subscribers anticipated by investors. While Netflix, well established for years, is already reaching saturation point, Disney will now have to seduce the spectators, after having conquered the fans.

Netflix, Disney, these two groups that have a good feeling of containment – via Disney + for the second city, which suffered at its amusement parks – saw their growth slow in the first quarter, after having served as a “refuge” for investors in search of “stay-at-home” values ​​during a year 2020 like no other.

When the market expected 109 million paying subscribers at Disney +, the enchanted kingdom delivered “only” 103.6 million, in its quarterly activity report published this Thursday after market close. This translates into a drop of 3.6% in trade before the opening of Wall Street for the title of The Walt Disney Company. “Keep in mind that we have conquered 30 million households (29.9 million, Editor’s note) during the first six months of the fiscal year”, recalled Bob Chapek, the boss of the group, during a conference call .

More impressive still, while Netflix took 10 years to reach the threshold of 100 million paying subscribers, Disney + achieved this feat in just 16 months, taking advantage of the perfect timing of the launch of its video on demand platform. , just before the start of lockdowns across the world.

Longer production times

Netflix also missed the target, only managing to grow its paying subscriber base by 14% over one year to 208 million, against 203.6 million at the end of December 2020 and while the group had promised 210 million subscribers. paid to investors. Unveiled on April 21, the quarterly results of the world n ° 1 of video on demand caused a plunge of 7.6% of the title listed on the Nasdaq. And since January, the Netflix share is down 10% and the Disney title shows a slight decline of 1.65%.

“We believe that the growth of our paid subscriber base has slowed due to the 2020 breakthrough related to Covid-19 and also because of a smaller content offering in the first half of this year, due to delays production due to the pandemic “, explained the Californian group, which however estimates to have finished 2020” with more subscribers and income than we would have had without the health crisis “.

In the ranking of the largest global valuations, the historic American entertainment empire Disney (26th to 323 billion dollars) remains ahead of the video-on-demand juggernaut Netflix (43rd, 215.8 billion) – both behind. as of December 25, when Disney was 23rd and Netflix 35th. This decline nevertheless comes after the spectacular stock market performances recorded by the two groups in 2020 (+ 66% for Netflix, + 31.5% for Disney). A feat all the more remarkable for the latter as the majority of its activity (amusement parks, cinemas, cruises, sporting events) has been greatly affected by the health crisis.

A dynamic in favor of Netflix

In terms of revenue too, Disney imposes more than Netflix – although the momentum is clearly in favor of the second (+ 24% to 7.16 billion dollars between January and March against -13% to 15.6 billion for the first over the same period). All of the group’s activities (derivative products, theme parks, etc.) saw their revenues drop, except for streaming platforms (Disney + as well as Hulu), which brought in $ 4 billion, + 59% over one year, a progression driven by Hulu’s hybrid model (subscription or free but with ads) which continues to gain momentum. “The growth in advertising revenue (on this service) has been particularly strong,” notes Eric Haggstrom of the eMarketer firm.

“Netflix has rallied only a small number of new subscribers and expects even less by the next results, notes the same analyst, for whom this constitutes” a source of concern because Disney +, Hulu, HBO Max and others are catching up with them in terms of US subscribers. ”The platform expects only one million additional subscribers during the current quarter, against 10 million last year at the same period, before a new impetus during the summer thanks to the return of very popular series like Sex Education or La Casa de Papel. “This means that Netflix is ​​undoubtedly close to saturation in the United States, its biggest market” adds Gene Munster of the Loup Ventures investment fund goes further by considering that the slowdown in growth seen in the first quarter of 2021 marks the start of “near-flat growth for the pioneer of the sector over the long term” . Netflix is ​​now focusing on Asia, where it is testing a mobile subscription at 2.99 euros per month, to serve as a growth driver.

Conquering new markets is also a priority for Disney, which will soon be available in Malaysia and Thailand in particular. Experts nevertheless predict an increase in acquisition costs (marketing, etc.) for the Californian group. “Disney + has done well to attract fans and families but now they will have to seduce spectators” not acquired in the universe of the mark, thus indicates Joe McCormack of Third Bridge.

To fuel its growth, Disney is promising significant investments in its successful franchises, such as Star Wars. He is betting among other things on the release, in June, of the Loki series, from Marvel studios, supposed to generate “a lot of attention”. “Attention is the precursor of net additions to subscriptions,” insists Bob Chapek, who took over from another Bob (Iger) last year.

Quentin Soubranne – © 2021 BFM Bourse

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