Disney's back catalog gives it a leg up over incumbent competitors such as Netflix, which has to spend more to differentiate their service with original content, according to RBC Capital Market's Mark Mahaney.
Competition in the video streaming sector is heating up, with Disney unveiling Thursday its plans to enter the space — but one analyst said the entertainment giant has a"major advantage" over the likes of incumbents like Netflix.
To illustrate his point, Mahaney cited Disney's expenditure plans of"spending a billion dollars on original content each year." In comparison,"Netflix is going to be spending seven or eight times that much," he told CNBC's"Street Signs" on Friday. In fact, licensed content on Netflix has done better, compared to the viewership that its original shows have attracted, said a Variety report in December that cited data from 7Park Data — a company tracking on-demand video consumption on streaming giants Netflix, Hulu and Amazon.
On the subject of competition, the tech expert said there was likely room for both Netflix and Disney in the streaming market.Even as Disney laid out its goal of reaching 60 to 90 million subscribers within five years, Netflix is"on track" to having more than 300 million members globally by that point, he said, adding that there's room for both services to reach those scales.
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