Media Exec: Disney Has 'Awful Lot To Work With' But Netflix Is 'Formidable'

The streaming video war between veteran Netflix Inc NFLX and newcomer Walt Disney Co DIS is a mere months away.

Should Netflix investors be concerned? Former NBC Cable President and Tivo CEO Tom Rogers offered his take during a CNBC interview.

What He Said

Disney boasts a large portfolio of intellectual property and brands which gives it "awful lot to work with" in the online streaming wars, Rogers said on CNBC. On the other hand, Netflix is "damn formidable," as evidence by its recent guidance of adding 30 million new global subscribers to its platform by the end of the year.

Netflix is also backed by its current base of around 60 million U.S. subscribers and a large budget for new content. As such, if any streaming platform loses market share at the expense of Disney it's unlikely to be Netflix.

The real competition in the streaming wars will be the smaller players with budgets of $1 billion to $2 billion, Rogers said.

Disney is set to launch a "subscriber friendly" platform that includes multiple properties fro $13 a month. Offering Disney, Pixar, ESPN, Hulu, among others, should give it second place in the streaming wars after Netflix.

Why It's Important

Disney can make money at $13 a month but investors are "largely missing" how many subscribers it needs to make up for traditional TV losses, he said. Specifically, Disney collects $8 per ESPN subscriber and another $9 to $10 per month from other TV properties.

If Disney loses out on 20 million TV subscribers over the next five years, the math implies it needs to gain around 30 million streaming customers to make up the difference, Rogers said.

"Disney has already been awarded with about $40 billion market cap increase since it announced its streaming plans in April," he said. "A lot of that is excitement on the growth of the streaming but you have to take into account how much the traditional TV world is going to be disrupted."

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