Netflix’s market value drops by $8 billion after the Disney Plus announcement

Netflix Inc. has lost as much as $8 billion in market capitalization in a few minutes of trading on Walt Disney Co.’s news of its upcoming streaming service, Disney Plus which is reportedly cheaper.

Disney has unveiled details of the service on Thursday after the close, stating that it would launch on 12th November at a price of $7 a month or $70 a year. Challenging the rival streaming service Netflix, whose most popular U.S. plan costs about $11 a month.

Disney’s plan is nearly half the price of Netflix’s standard $13 monthly plan, at its 2019 Investor Day on Thursday.

As being reported, Netflix shares fell as much as 5 percent to $349.36 shortly after the open in New York Friday, sending its market as low as $152.5 billion.

Patrice Cucinello, director of the technology, media and telecom group at credit-rating firm Fitch Ratings says, “Disney is approaching streaming offerings with guns blazing, looking to take share and quickly ramp up subscriber growth. Disney+ will be loaded on Day One with attractive IP and franchises, and has set the price very affordable at $6.99 per month, well below other premium SVOD offerings.”

Analysts are endorsing that Disney is playing a long game in battling for streaming subscribers.