The firm said customers will "mostly come" from Netflix because "US consumers have shown a reluctance to add" more streaming services.
Disney, which is launching the service in November, announced Tuesday it will offer a bundle of Disney+, ESPN+ and ad-supported Hulu for $12.99 per month, the same price as Netflix's standard plan.The stand-alone Disney+ will cost $6.99 per month or $69.99 for a year. Netflix's service starts at $8.99 a month.
This price difference between the most basic versions of Netflix and Disney+ is one of the main reasons Disney is set to attract Netflix's customers, according to Needham. The five other reasons the firm listed are:
Needham maintained its hold rating on Disney, citing concern about how the $71 billion acquisition of Fox will affect earnings in the near term. Disney on Tuesday missed expectations on the top and bottom lines for its fiscal third quarter, and shares were down 5.5% Wednesday morning.
The company generated $1.35 in earnings per share on $20.25 billion in revenue as it continues to integrate Fox's entertainment assets. Analysts expected $1.75 in earnings per share and $21.47 billion in revenue, according to Refinitiv.