How Netflix and Disney are fighting for the future of streaming: Kids

Netflix streaming
Trollhunters on Netflix

Since its pivot from independent DVD-distributor to media streamer, Netflix has bested the biggest media companies in the business to become the world’s most dominant streaming powerhouse. Even as competition has heated up from challengers like Hulu and Amazon Prime, and newcomers like Apple and Facebook, Netflix’s mix of top-notch management and an ever-flowing ocean of content have kept the company in the driver’s seat.

Yet, while most of us use Netflix daily to veg out (or “chill”), parents depend on Netflix for a very different application: Keeping the kids occupied. More than just a portal to an infinite well of TV shows and films, Netflix is also America’s most prominent babysitter. No need to worry about your kid seeing the sugar cereal ad, or the latest mecha-robot doll; just hours and hours of commercial-free entertainment stretching to oblivion.

As streaming services continue to expand, and rivals fight it out, the most prized eyeballs of all will be those of the billions of children out there. And while Netflix is well positioned for the war to come, big red and its rivals will soon have another player to contend with, straight from the House of Mouse itself. Disney is tossing it’s mouse ears into the ring, bringing its unique reach into the hearts of young viewers (and the young at heart) that could make it a new contender for the throne.

Disney Play

Disney’s forthcoming streaming service, Disney Play, may be late to the party, but given that Disney is arguably the most powerful name in entertainment right now — and the service is poised to launch with live-action TV shows from both the Star Wars and (possibly) Marvel universes — one might say the company is arriving fashionably late.

netflix disney dominate streaming kids shows ferb photo 2
Phineas and Ferb

Along with Marvel Studios and Lucasfilm, the much-discussed multibillion-dollar deal for the majority of 21st Century Fox properties (including the entire film division and most of its TV holdings) gives Mickey and Co. an unprecedented cache of ammunition to level at its streaming rivals, including Disney’s current partner and licensee of all its films, Netflix. And that’s just for the grownups.

For children, Disney not only owns powerhouse animation studios Pixar and Disney Animation, but its streaming arm will also potentially be able to pull programming from its stock of cable channels, including Disney XD, Disney Junior, and of course, the Disney Channel, the cable crown jewel for the under-12 crowd.

“We want to walk before we run when it comes to volume of content.”

That said, while Disney chief Bob Iger has consistently promised the company’s new streaming service will come to, well, play, Disney isn’t expected to put all its eggs in the streaming basket, so to speak, and sacrifice its many other revenue streams just to prop up Disney Play.

In fact, many of its film and TV properties, including the Marvel/Netflix superhero shows like Daredevil and Luke Cage, are already licensed to other companies. Instead, Disney will wade in slowly.

“Our first priority is going to be reaching our core Disney fan,” Iger told investors while speaking about Disney Play in August, according to Variety.

“We want to walk before we run when it comes to volume of content,” he said. “We have to put enough on to make sense from a price-to-value relationship perspective.”

That’s bet hedging if we’ve ever heard it.

Avengers Infinity War
Avengers Infinity War

Still, this is Disney, and its ability to offer tons of commercial-free children’s programming at a low cost may just be one of its biggest tickets to the streaming party. A significant advantage to that end is Iger’s promise that the service will undercut Netflix’s pricing model. After all, even if there’s only a limited amount of Marvel and Star Wars films available in the Disney Play mix, once your kids get used to calling up Phineas and Ferb reruns on demand, it’s not likely you’ll pull it out from under them to save $5-6 per month.

What’s more, since its purchase of Fox, Disney has wisely — and somewhat under the radar — landed a majority stake (60 percent) in Hulu, which it will share with Comcast (30 percent) and Time Warner Inc. (10 percent). Unless the FCC calls foul, that gives Disney operating control over yet another online avenue to peddle its wares, one that’s already well established in the streaming infrastructure.

Not so fast, Mickey

While Disney looms large, Netflix knows all too well how important child viewers are to its ceaseless quest for global dominance, and the company is bolstering its own arsenal when it comes to children’s programming. It’s difficult to get the details behind the streaming superpower’s viewing data, but some telling numbers from a presentation last fall by Netflix’s former Director of Kids and Family, Andy Yeatman, paint a pretty rosy picture going forward.

netflix adapt series unfortunate events tv show of
Lemony Snicket’s Series of Unfortunate Events on Netflix

As reported by Variety, in October of 2017 Yeatman claimed as many as 200 TV shows in Netflix’s Kids and Family section (most of which were acquisitions) had been viewed by at least 2 million households, while over half of its worldwide “104 million households” had streamed Kids and Family content at least once.

Perhaps most telling is that, as Netflix seeks to fortify its viewing numbers in fertile regions like Asia and Europe, the company saw the Kids and Family section’s streaming numbers climb by 61 percent worldwide, compared to just a 13 percent growth in the more saturated U.S. market in 2017. While this divide isn’t as robust as its gross international subscriber adds from July’s Q2 report (90 percent of which came from overseas), it’s clear that the thirst for quality children’s programming globally presents a big opportunity for expansion.

Netflix’s sheer number of subscribers of well over 100 million dwarfs all competitors combined.

Children’s shows are just a portion of Netflix’s overall content spending, but with a budget of around $8 billion for 2018, the company spends more than anyone else in TV — streaming or otherwise. Moreover, Children’s programming will be a big fixture as the company seeks to create and acquire shows that are easily adapted to multiple countries. That includes animated shows like Mighty Little Bheem, a new Indian series that is “non-dialogue” and relies instead on visual cues. Currently, Netflix has dozens of original kids shows, and you can expect that number to grow in the years to come.

Just as important as its volume of content, Netflix (like Disney) has also worked hard on putting together programming that adults and children can watch together. Shows like the Voltron reboot, Guillermo Del Toro’s TrollHunters, Lemony Snicket’s Series of Unfortunate Events, and even Beat Bugs, which revolves around Beatles song covers, keep parents sane and free from the dreaded Barney effect.

beat bugs official trailer head
Beat Bugs on Netflix

Even when putting content aside, Netflix’s sheer number of subscribers of well over 100 million dwarfs all competitors combined; Amazon boasts around 26 million subscribers (according to leaked internal documents), Hulu has a base of around 17 million, and HBO Now currently hosts just 5 million. More pointedly, other streamers have yet to venture into the global marketplace on such a massive scale as Netflix. Outside U.S. borders, Amazon’s service is based primarily in Europe and Canada, while Hulu and HBO Now have yet to make the global jump at all.

A massive playing field

Of course, the other big streamers have invested in children’s programming as well. Amazon Prime currently hosts dozens of children’s shows, including its own originals, and Hulu also has its fair share thanks to its wealthy parent companies (which it wisely offers commercial-free). Even HBO, known for its adult programming like The Sopranos and Game of Thrones, has made significant moves, including the purchase of Sesame Street from PBS, and now that the network has AT&T and all its billions behind it, we can expect more of the same in the future.

The streaming entertainment landscape is vast and still expanding, and there will be plenty of room for multiple services to survive and even flourish — especially if companies like Amazon and HBO are willing to keep throwing billions of dollars at content to stay in the game.

But the battle below the service — the fight for your children’s eyeballs — will determine who rises to the very top, and on that front, Netflix and Disney are in prime position.

Updated 9/26/2017: This post has been updated to clarify the timeline for the Variety report sited, which was published in October of 2017.

Home Theater

AT&T takes aim at Netflix with HBO-led streaming service set for a 2019 launch

HBO fans have worried that parent company AT&T was looking to turn it into Netflix, but the company is now looking to instead launch a new, separate streaming service with programming from HBO, as well as Warner properties.
Movies & TV

Do you have questions about Hulu? We’ve got answers

Not sure which Hulu subscription is right for you? We're here to help. This is your complete guide to Hulu and Hulu with Live TV, including content offerings for each service, pricing, internet requirements, and more.
Movies & TV

Lose the torrents. Here's how to watch 'Game of Thrones' online (legally)

Game of Thrones is one of the most popular shows on TV, but unless you're a cable subscriber, finding a way to watch isn't always easy. Check out our guide on how to watch online, whether you prefer using HBO, Sling TV, Hulu, or Amazon.
Movies & TV

Binge away with our guide to the best on-demand streaming services

Looking to waste a weekend bingeing or just putting together a movie night? Find out everything you need, from prices to features, in our guide to the best online streaming sites and services for on-demand movies and TV shows.
Music

From 'E.T." to 'Lord of the Rings,' these are the best movie soundtracks ever

Whether you're a lover of beautifully composed original scores or a fan of perfectly compiled popular music, these are the best movie soundtracks of all time — from Star Wars to Garden State.
Podcasts

Spooky movie streaming, a new 'Glass' trailer, and Snapchat TV?

This week on Between the Streams, we'll be discussing the best way to get your scares online, James Gunn's turn to the DC side of the comic universe, our most anticipated new TV series, the trailer for the Pet Sematary reboot, and much…
Movies & TV

The best movies on Netflix in October, from 'The Witch’ to ‘Black Panther’

Save yourself from hours wasted scrolling through Netflix's massive library by checking out our picks for the streamer's best movies available right now, whether you're into explosive action, subdued humor, or anything in between.
Movies & TV

The best shows on Netflix in October, from 'Mindhunter’ to ‘The Good Place’

Looking for a new show to binge? Lucky for you, we've curated a list of the best shows on Netflix, whether you're a fan of outlandish anime, dramatic period pieces, or shows that leave you questioning what lies beyond.
Movies & TV

Stream till you scream with the best scary movies on Netflix, Hulu, and more

Need some ghoulish entertainment to get in the Halloween spirit? Check out some of the best horror movies streaming now. Whether you like creepy atmosphere or bloody jump scares, you'll find something to spook you.
Movies & TV

Out of movies to binge? Our staff picks the best flicks on Hulu right now

From classics to blockbusters, Hulu offers some great films to its subscribers. Check out the best movies on Hulu, whether you're into charming adventure tales or gruesome horror stories.
Movies & TV

Stay inside this summer with the best shows on Hulu, including 'Castle Rock'

It's often overwhelming to navigate Hulu's robust library of TV shows. To help, we've put together a list of the best shows on Hulu, whether you're into frenetic cartoons, intelligent dramas, or anything in between.
Movies & TV

The best new movie trailers: ‘Glass,’ ‘Mortal Engines,’ ‘Pet Sematary’ and more

Everyone loves a good trailer, but keeping up with what's new isn't easy. To simplify things, we round up the best ones each week. On tap this week: New trailers for Pet Sematary, Glass, Mortal Engines, and other upcoming films.
Movies & TV

The best movies on Amazon Prime right now (October 2018)

Prime Video provides subscribers with access to a host of fantastic films, but sorting through the catalog can be an undertaking. Luckily, we've done the work for you. Here are the best movies on Amazon Prime Video right now.
Movies & TV

Best new shows and movies to stream: ‘The Haunting of Hill House’ and more

Need something to watch this weekend? Check out our list of the best new shows and movies to stream right now. On the list this week: The Haunting of Hill House season 1, The Romanoffs, and more.