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Tech expert on streaming wars: 'They're all going to come back to Netflix'

Grete Suarez

When Disney+ (DIS) launched last month, doomsayers believed it could be the ultimate “Netflix-killer” — but a tech expert says not so fast. He believes that over the next six to 12 months, we’ll see what he calls an “and” strategy, where consumers leave Netflix (NFLX) to try something else but ultimately come back.

“So Disney+ we’ll try something else, we’ll try Roku (ROKU), we’ll try Apple (AAPL), we’ll try whatever’s coming out there, but [ultimately] they’re all going to come back to Netflix,” said R “Ray” Wang, CEO of Constellation Research on The Ticker.

Netflix has been flexing its powers abroad, showing off strong growth in subscribers and revenue broken down by region.

Netflix paid subscribers by region

In a new 8-K filing, the streaming giant boasted revenues of $2.76 billion in the third-quarter from its global markets, up 39.8% from a year ago of the same quarter.

“International subscriber growth is not something easy to do — it’s not like other people are going to jump out and get into these markets,” Wang said. “The main thing is, growth has slowed down in the U.S. and Canadian markets, and the streaming wars are coming.”

Moreover, Netflix has been excelling at creating original content. Variety recently reported that Netflix created 371 new TV shows and movies in 2019 — up from 240 last year.

Still, Wang said Disney has an advantage entering the streaming wars, because it is about “content, network, technology, and consumer” — all four components the media giant has from the start.

Netflix average monthly revenue per subscriber

Other streaming newcomers including Comcast (CMCSA) and HBO (T) are in the lineup next year and could heat things up.

While Apple made a lukewarm entry into the streaming wars, Wang warns against dismissing its potential outright.

“Apple itself is coming in at a very, very slow pace, but think about that — you’ve got almost a billion iPhone users that can suddenly become an Apple TV subscriber,” said Wang.

Still, Wang believes investors holding onto Netflix for the long-run are “going to be fine.”

“It’s going to be Netlfix plus something else, Disney+ plus Netflix… that’s going to be what the landscape will look like in North America,” he said.

Grete Suarez is producer at Yahoo Finance for YFi PM and The Ticker. Follow her on Twitter: @GreteSuarez

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