Netflix (NFLX -1.13%) shareholders already fretting about the impact that the Nov. 12 launch of Disney's (DIS -1.79%) new premium video service will have on the niche leader's subscriber count may have another day to circle during the same month. Bloomberg is reporting that Apple (AAPL 0.49%) also plans to roll out Apple TV+ -- its own streaming platform -- in November, according to people familiar with the matter. Bloomberg is also reporting that the tech giant is considering a $9.99 monthly price point,
Making a big splash in November makes sense for Disney and Apple. Holiday shoppers will be loading up on smart TVs and streaming devices later in the month, and it's harder to stand out in December when everyone's marketing gift ideas. Launching just ahead of Thanksgiving gives the two companies as much time as possible to launch with an impressive slate of content without getting lost in the holiday shopping shuffle.
Smacking into the wall of worry
Netflix isn't at its best right now. It fell woefully short of its earlier subscriber forecast in July's second-quarter report, and its stock has fallen by 15% since that poorly received update. Netflix is going to have a lot on its plate when it reports its third-quarter financials come mid-October.
It could be a lose-lose scenario for Netflix. If it has another rough quarter in terms of net subscriber additions, the stock is going to get smoked. However, if Netflix comes through with a blowout performance -- the way it has in at least three out of every four quarters over the past few years -- investors are still going to worry about the launch of Disney+ and Apple+ just a few weeks later.
We know Disney is going to be strong. Aggressively pricing its service at $6.99 a month -- a little more than half of Netflix's $12.99 cover charge -- is going to make the House of Mouse a consumer magnet. Apple at $9.99 may seem to be a more challenging sell, but the class act of Cupertino was never going to be the low-price leader.
Disney has the content. Apple has the well-heeled clientele. Netflix is going to have its hands full.
Netflix can still win, of course. The launch of Disney+ and Apple TV+ is going to inspire more people to cut the cord, and a bundle of Netflix, Disney+, and Apple TV+ at less than $30 a month is going to be a much more compelling value proposition than larger cable and satellite television bills.
Disney is going to have a huge catalog of content when it launches, and any fears that Apple would be phoning it in later this year were silenced on Monday when it rolled out a trailer for The Morning Show, the star-studded serialized drama that should anchor the platform at its launch. Apple will be taking the HBO approach, going for quality over quantity -- even though Netflix would counter that it already has market cornered on both fronts.
Netflix has the benefit of a dozen years of streaming data and the largest content budget, but there will still be question marks until it survives the fourth quarter with respectable growth. November is going to be a long month for Netflix, but it could also be a glorious one if Netflix comes through with a monster report in January.