Netflix Inc. is being targeted by two deep-pocketed new rivals, but it prepared for questions about how that could affect its business by changing its definition of “competition” in advance.
Since Netflix NFLX, -0.65% showed off a total of 139 million paying subscribers as of the end of 2018, Apple Inc. AAPL, +0.18% and Walt Disney Co. DIS, +1.52% have officially debuted their visions of streaming television services. Now, Netflix must prove that it can continue to grow its subscriber base, as its customers are wooed by two giant companies that know how to woo consumers.
But Chief Executive Reed Hastings — who once said that a streaming HBO would be his greatest competition — has changed his handicapping of the race.
“We compete with (and lose to) Fortnite more than HBO,” the company said in its letter to shareholders for the holiday quarter. Netflix’s focus “is not on Disney+, Amazon or others, but on how we can improve our experience for our members.”
In other words, Netflix views the current streaming players as well as soon-to-launch offerings from Apple and Disney as merely blips on its radar as tries to win share of consumer screen time from more varied entertainment sources. Really, Netflix’s challenge is to maintain it’s incredible growth rate while not losing customers to the new rivals. Netflix added 30 million net new subscribers last year as its international push took hold, and is expected by analysts to add at least another 30 million this year.
The subscriber numbers are usually the figures that move the needle for Netflix