Analyst: Netflix Losing Disney Doesn't Matter Because Most Markets Never Had Disney Content In The First Place

Walt Disney Co DIS' decision to part ways with Netflix, Inc. NFLX in 2019 has been a notable concern for investors but these fears may be overblown, at least according to Bernstein's Todd Juenger.

Juenger took a deep dive into Netflix's relationship with Disney. According to his findings, Disney's decision to part ways with Netflix and create its own streaming video profile should have "no effect" on its international growth.

Outside of the U.S. and Canada there are just a very small handful of countries where Disney's content is currently available to Netflix's subscribers. Out of the 31 largest international markets, only Netherlands and Australia carry Disney's content, which implies that the vast majority of international markets never had Disney's movies and TV shows to begin with -- and likely never will.

As such it is difficult to understand the "level of commotion this future Disney U.S. non-renewal has caused for Netflix stock," the analyst acknowledged. After all, Disney's content played zero role in growing Netflix's international business over the years, so why the commotion now?

There might be two reasons to explain the concerns, the analyst said, 1) could be attributed to investors having a poor understanding of the facts, and 2) investors are now concerned Disney's exodus will prompt other studios to start their own platform.

To the second point, the analyst suggested it's too late for studios to build their own streaming platform as their is a major financial incentive to remain on the Netflix platform.

" Netflix has gotten so big, they are (by far) the customer with the highest ability to pay (globally) for content they want when it becomes available for syndication (i.e. Netflix can write a really big check)," the analyst wrote.

Juenger maintains an Outperform rating on Netflix with an unchanged $203 price target

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