Netflix co-CEO Reed Hastings sees Netflix competing directly with Disney for the next 50 years in the area of family animation. Netflix has been able to tap into some successful IP that has allowed it to make a place for itself in the internet-based entertainment business. The challenge that Netflix faces is that Disney has been a cornerstone of family animation for a century.
Netflix has been able to position itself into content creator territory with family entertainment offerings that have been noticed by the wider industry and popular culture. Series such as Lemony Snicket’s A Series of Unfortunate Events, an updated version of Voltron Legendary Defender, and Oscar-nominated Klaus have proven that Netflix is not just a streaming service for older favorites, but also one for kid's programming. While this may be the case, in order to be a true contender at Disney’s level, Netflix has a long, hard fight ahead.
Netflix has been expanding its children’s and family offerings for years. Hastings’ desire to beat Disney at what it's best known for is still an ambitious goal. Disney still has instant brand recognition that Netflix has not yet achieved.
Walt Disney released Steamboat Willie in 1928. Prior to that, Disney had been creating animation, as well as combining animation with live-action beginning in the early 1920s. The Alice Comedies and Oswald the Rabbit were the earliest Disney properties. After losing Oswald to Universal, Walt created a new character with artist Ub Iwerks that would launch what we know as the Walt Disney Company. Mickey Mouse is known around the world and has become a trademark symbol -- something that Netflix does not have.
Despite this, one thing Netflix has going for it is being a leader in online streaming. As one of the oldest streaming services, Netflix went from offering movies and television series that could also be rented on DVD to being the source behind blockbuster level and Academy Award-nominated movies and documentaries. It has also shown an ability to offer content that people are able to connect to (i.e., Stranger Things, Fuller House, The Babysitters Club, Avatar).
Netflix also has Disney's streaming service beat in sheer numbers of subscribers. According to Netflix’s latest shareholder’s letter, it had 193 million paying subscribers around the world. This put the total worth of Netflix above that of Disney for a time. That allows it to have a large enough market to compete with Disney+'s 60.5 million subscribers.
What Netflix doesn’t possess is a single brand that can unify its family animation and entertainment offerings. It has a variety of titles that are recognized on their own. Nothing about Carmen SanDiego, Transformers, Avatar the Last Airbender, She-Ra, or Spirit give Netflix the name power it needs to be a Disney-level threat. Netflix, in reality, relies on DreamWorks for many of its animated offerings, and that may be the best strategy for Netflix.
Disney is an obvious juggernaut in family animation entertainment. What makes Disney even more challenging to beat is the partnerships it has forged (and absorbed) in the last 20 years. Pixar, Star Wars and Marvel are all now under the Disney umbrella, adding to its catalog of characters and animation offerings. Netflix would need some powerful partnerships to step up to Disney’s level.
Hastings sees this as a marathon that could last for 50 years. Disney is also feeling a little bruised after the criticism of its latest live-action adaptation, Mulan. If Netflix can play their partnership cards right, they have an opening to capitalize on Disney's unfortunate stumble. One possible source of content IP could be the agreement signed between Netflix and BOOM! Studios. This allows Netflix the first chance to develop any of the properties of the comic book publisher into television or film content.
Whether Netflix creates its own Harry Potter or Star Wars level IP or uses its partnership power, it has to create a unifying property to build around. Walt famously claimed that Disney “was all started by a mouse.” Netflix needs its own “mouse” to be able to compete with this family animation giant.