Netflix to Disney: This is what it means to be streaming first

On October 20, Netflix threw down the gauntlet to Disney, showing its arch rival what it really means to a be a streaming-first company.

The news comes just a week after Disney announced a major reorganization that will see the company centralize its media businesses around streaming—namely, Disney Plus—as it attempts to offset the devastating effects of COVID-19 on its theatrical and theme-park business. The pandemic has forced the company to push major releases slated for movie theaters into the new year and some, like Hamilton and Mulan, onto its streaming platform. Disney’s theme parks have also been hit hard by the pandemic, leading to the recent layoff of 28,000 employees.

But as Disney reverses course and gears itself around Disney Plus, with a likely expansion of streaming’s original content budget and production slate, it is doing so very much on the heels of Netflix, which on Tuesday reminded the world of how a purebred streaming company rolls. Despite the production-strangling effects of COVID-19, which has caused most of Hollywood filming to grind to a halt, Netflix has already restarted production on the fourth season of Stranger Things; the Dwayne Johnson action film Red Notice, and the second season of The Witcher. It announced that it completed production on more than 50 projects during the pandemic, and by the end of the year, Netflix said it plans to have completed shooting on more than 150 other titles.

Netflix’s report also revealed how the company continues to churn out original content that is purposely built for streaming, as opposed to titles intended for the big screen—such as the forthcoming Soul from Pixar set for a Christmas Day debut on Disney Plus.

In the last quarter, Netflix debuted new seasons of The Umbrella Academy and Lucifer, which it claims were viewed in 43 million and 38 million households, respectively, over their first 28 days of being available. Ryan Murphy’s One Flew Over the Cuckoo’s Nest spin-off, Ratched, drew a reported 48 million households in its first four weeks. Another buzzy title, the documentary The Social Dilemma, was streamed by 38 million households in its first 28 days, according to Netflix’s shareholder letter.

On the film front, The Old Guard, starring Charlize Theron and directed by Gina Prince-Bythewood, was the most popular title of the quarter, attracting 78 million households in its first four weeks. And The Kissing Booth 2 was watched by a reported 66 million households during the first 28 days.

This decline sent Netflix’s stock down about 5% during after-hours trading on Tuesday.

In a letter to shareholders, Netflix—which enjoys coyly needling competitors—mentioned Disney’s corporate reorganization, writing, “We’re thrilled to be competing with Disney and a growing number of other players to entertain people; both consumers and content creators will benefit from our mutual desire to bring the best stories to audiences all over the world.”