Disney’s (NYSE: DIS) foray into the streaming business has been swift and bold. Last week, The Wall Street Journal reported that the entertainment behemoth has banned Netflix (NASDAQ: NFLX) ads across all of its TV channels except ESPN – a move designed to choke the competition ahead of the launch of Disney+ next month.

Shares of Netflix have tumbled around 3% since the news broke Oct. 4.

 

Disney Makes a Bold Statement

As WSJ reported, Disney earlier this year issued a blanket ban on all forms of advertising from rival streaming services. The company’s executives later reversed course and found a compromise with every major streaming company except Netflix. According to people familiar with the matter, Netflix and Disney have no mutual business or advertising relationship. This gave Disney leeway to cut Netflix ads across most of its TV channels and other mediums.

Netflix also happens to be the world’s largest streaming service with nearly 160 million subscribers. With Disney+ set to roll out Nov. 12, Netflix is the one to beat.

 

Streaming Wars Heat Up

All of Netflix’s new competitors offer lower price points compared with the original streaming giant.

Disney isn’t the only company trying to dethrone Netflix as king of video-streaming. Hulu, HBO Max, Amazon Prime Video, Apple TV Plus, AT&T’s WarnerMedia and Comcast’s Peacock are all part of an evolving landscape trying to tap into the multi-billion-dollar industry.

Each streaming service has its own unique set of advantages. Netflix has a ten-year head start on most of the competition and has pushed the envelope with original content. Apple is offering free one-year subscriptions to anyone who buys a new device. Disney+ has a massive catalogue of original content spanning Disney Animation Studios, Pixar, Marvel Studios, Lucasfilm, National Geographic, 20th Century Fox and others.

All of Netflix’s new competitors offer lower price points compared with the original streaming giant.

Advertising will play a big role in boosting adoption. According to WSJ, NBCUniversal is planning to spend around $100 million on ads outside of its own properties to launch Peacock. AT&T’s WarnerMedia will dole out $300 million on ads next year to push HBO Max.

Disney, on the other hand, already has its foot in the door through its ownership stake in Hulu. The streaming platform spent $161.2 million in advertising last year, according to Kantar.

 

Conclusion

As the competition for streaming supremacy heats up, big tech firms are redrawing their battle lines. Companies that were never considered natural competitors are now fighting for their share of a market that is expected to reach almost $125 billion by 2025. While competition is good for consumers, decision fatigue is already becoming a factor.