Disney Has Already Lost the Streaming Wars

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Walt Disney Co. (NYSE: DIS) CEO Robert Iger topped off the company’s earnings announcement with a long exposition about how his company would become a dominant force in video streaming. He has some of the assets to do so, but none of the streaming media customers. His established rivals have tens upon tens of millions. Most people who want a streaming service already have one, or more.

Iger’s theory is that Disney’s brands like Mickey Mouse and Pixar will help it get streaming customers. As it adds many Fox assets, it will pick up a large number of others. These will be the foundation of the Disney streaming business. Consumers will turn to the Disney subscriber package because many of the studio’s films will not be available elsewhere.

Disney has to deal with huge competitors, and that means it has to deal with the issue of how many streaming services any household wants. Netflix Inc. (NASDAQ: NFLX) has over 130 million customers. Amazon.com Inc. (NASDAQ: AMZN) has over 100 million Prime subscribers, each of whom has access to is streaming media service. Then there is Hulu, AT&T Watch TV and a number of streaming options from Time Warner, including an HBO streaming service HBO Go. And that is a short list.

Iger’s dream is that Disney will become a dominant force in streaming and perhaps match the quarterly revenue of $2.9 billion posted by its Studio Entertainment business. It includes franchises like the Marvel Cinematic Universe and Star Wars. It won’t happen, the sector is already too crowded, and it is unlikely people will want three, four or five streaming media services, with the Disney services as the fourth or fifth.