COVID-19 is the main reason why Netflix is worth more than Disney, says GlobalData

Netflix has weathered the COVID-19 storm extremely well compared to competitors such as Disney, says Globaldata, a leading data and analytics company.Netflix’s market capitalization, at market close on 21 April, was $190.4bn, which is higher than Disney, Exxon and IBM, and up from $142bn on 31 December 2019. It has also announced quarterly results that show it added 15.8 million subscribers in the three months to the end of March 2020, which is up from the 8.8 million it gained in Q4 2019.

Danyaal Rashid, Thematic Analyst at GlobalData, comments: “These strong financials are reflective of GlobalData’s position on Netflix, which has been positive since the outbreak of COVID-19. The company believes that Netflix will do well out of this crisis as more people will be taking up subscriptions and existing customers will be retaining their contracts. Netflix is ranked second in GlobalData’s music, film, and TV thematic rankings, behind only Amazon, and has received a rating of four out of five for the coronavirus theme – the joint highest rating.

“In contrast, Netflix’s rival Disney has suffered as a result of the pandemic. In the music, film and TV thematic rankings, Disney has fallen three places to tenth, having been awarded a score of two out of five for its ability to deal with COVID-19. Disney’s market cap has fallen from an all-time high of $273bn in late November 2019 to just $181.5bn at market close on 21 April 2020.

“There are two main reasons why Disney has struggled while Netflix has prospered. Firstly, unlike Netflix, Disney is reliant on ad revenues due to its broadcast offerings, and this revenue stream is drying up rapidly. Secondly, COVID-19 has forced Disney to close its theme parks, which generate more than a third of its revenues, delivering a huge hit to the company’s top line.”

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