The race for premium streaming video leadership is basically boiling down to Walt Disney's (NYSE:DIS) Disney+ and Netflix (NASDAQ:NFLX). The latter will always be in the conversation. Netflix kicks off 2020 with 203.7 million streaming paid memberships worldwide, and by the end of next month, it expects to be near 210 million. 

Disney+ has less than half of Netflix's premium sub count but is growing considerably faster. It had exploded to 94.9 million premium subscribers by early January, an amazing feat for a platform that wasn't even around 14 months earlier.

Disney naturally has a lot more to offer than Disney+ -- and we'll get there shortly -- but it's as good a place as any to start to decide which market darling belongs in your portfolio. Is Disney the better buy? Is Netflix the better addition? Let's take a deeper dive to see which one should be at the top of your shopping list.

A woman channel surfing with one hand as she reaches for a popcorn bowl with the other.

Image source: Getty Images.

Nothing but Netflix

Disney+ is naturally growing a lot faster than Netflix, but let's not assume that the top dog is a slowpoke. Netflix had 158.3 million premium accounts on its rolls at the end of the third quarter of 2019, weeks before the Disney+ launch. The 45.4 million net additions it has scored since then is less than half of Disney's market grab, but there's more to the dominance of Netflix than just a raw headcount of viewers. 

There's pricing elasticity to the Netflix model. It's raising the price of its most popular plan this year, something that it has now done five times since early 2014. Average revenue per membership has risen from $9.88 to $11.02 a month, despite pushing into cheaper international markets and facing foreign-exchange headwinds.

Disney+ costs considerably less than Netflix, and its average revenue per membership has been falling since its launch as it ports its platform overseas with more affordable rates in developing international markets. Disney's monthly average revenue per user has fallen from $5.56 to $4.03 over the past year. Spooned out in a new way, we're talking about Netflix on a revenue run rate that translates into $2.2 billion a month -- nearly six times greater than Disney+ at $382 million. 

There's advantage to Netflix's scale. If you're trying to sell a new movie or show, you want Netflix to reach the largest audience possible. No company can spend as much as Netflix without breaking the bank, as it can divide its programming costs by the largest paying audience.

Netflix has to win this fight? Right? Well, cue Mickey Mouse.

The mouse always wins

If this was simply a battle of Disney+ versus Netflix, then of course, the nod would go to Netflix. Disney's market cap of $347 billion is $100 billion greater than Netflix's. However, Disney's namesake direct-to-consumer streaming service is just a small part of the empire here. Disney+ may be the business generating all of the buzz and headlines, but it's currently accounting for just 7% of the media stock's revenue. 

Right now, Disney+ isn't even the entertainment giant's biggest moneymaker among streaming services. Disney-owned Hulu is actually generating more than twice the revenue of Disney+. Investors are also getting the world's most visited theme parks, ABC, and a majority stake in ESPN.

In a world where content is king, Disney owns Pixar, Marvel, and Lucasfilm. This is a portfolio of intellectual property that was able to crank out the six highest-grossing movies of 2019 -- you know, when we used to go to the movies. 

Netflix is great, and even when Disney's running on all cylinders, Netflix will still be the company that's growing faster. I own shares of both companies, so I obviously believe that both stocks can beat the market. However, with Disney having so much to offer beyond its rapidly growing Disney+ platform, it's the better buy here.