When Walt Disney  (NYSE:DIS) unveiled its plan for its new streaming service, Netflix (NASDAQ:NFLX) stock dropped on the news. However, these types of short-term market reactions do not reflect the actual long-term dynamics in a rapidly growing space. Netflix stock still has a comfortable lead and less baggage.

While Disney has an inimitable brand that is filled with nostalgia, that in and out itself does not assure immediate dominance in tv streaming.

In other words, content matters, but it is not everything. Disney will need to deliver a lot of new content to the right viewer on the right device. Unless Disney really sinks a lot of investment into the venture, it won’t be the kind of threat to Netflix that some think.

Disney’s Design Flaw and Netflix Stock

The current user interface that Disney proposed at its investor day is focused on the major franchises e.g., Star Wars, Marvel, etc. On its face, it seems like a good idea. These are big brands and grab eyeballs. However, with all the clicking and scrolling, it’s easy to see why Netflix’s sleeker interface is better at reducing search time and increasing viewing time.

Every time viewers open Netflix, they have a new set of recommendations. With Disney+, it sounds like the landing page will be static. The brands are great, but it becomes harder to show the new content that is crucial to keeping subscribers from dropping off.

Netflix’s title-based approach is better in this way.

The goal for Netflix is that the viewer opens the service on any device and goes straight to viewing. No muss no fuss. Their algorithm correctly matches suitable content for that particular viewer and it’s straight to streaming. Personalization matters and that has been something Netflix has been extremely good at. It’s not easy to continually remind the viewer that a service is a good value. Netflix has been tinkering with this, and it remains to be seen whether or not Disney+ will be as good.

Netflix Stock and the Changing Culture

While new entrants are viewed as threats to incumbents in the streaming business, it is not exactly a zero-sum game. As linear television wanes in popularity and the rise of disparate services becoming more the norm, it is important to note that households often have multiple subscriptions to varying services like Hulu, HBO, and Netflix as opposed to just one.

So just because Disney launches its Disney+ service doesn’t automatically mean that Netflix suffers. Competitors without robust content libraries and that rank low on user experience will suffer. It’s not a guarantee or even likely that Disney+ eats Netflix’s lunch. In fact, I think the latter will do just fine.

It is true that CEO Bob Iger has indicated that Disney+ is the company’s top priority. What is also true that Disney+ is geared toward kids. ESPN+ is a separate service, and there is no news either. Even at bargain prices, adults are going to want to watch more than Lion King on a loop.

The Bottom Line on Netflix Stock

At the end of the day, there is room for both companies to do well. Consumers routinely pay anywhere from $50 to well over $100 for video bundles. Between Netflix and Disney, the total comes to just about $20 a month, depending on the exact subscription package. This is readily affordable for households accustomed to the traditional bundle.

As Netflix further emphasizes on its website,

“Because the entertainment market is so broad, multiple firms can be successful. For example, ABC and NBC have historically competed for viewers, attention and content but have also successfully co-existed for many decades. Similarly, in the internet entertainment world, HBO is now growing faster than in years past, while our business is also expanding. Many people will subscribe to both HBO and Netflix since we have different exclusive content. The transition to internet entertainment, with its greater consumer satisfaction, will mean growth for many services.”

So overall, it’s unlikely that this will negatively impact Netflix subscribers. What it might do is put a cap on Netflix’s ability to raise pricing. Disney+ has defiantly priced its product at about a third less than Netflix’s—$6.99 compared to $11 to $13 a month.

Remember though, that this isn’t an industry where the lowest cost provider automatically wins the most new business. It feels naïve to think that just because Disney+ is a few bucks cheaper, people will switch in droves. For adults who want to watch House of Cards or The Crown or Stranger Things, they have to go to Netflix.

Disney+ and Netflix are not exact substitutes, in economics jargon.

So long as Netflix’s slate of new content continues to satisfy viewers, their differentiated content will be a buffer against any potential risk of subscribers dropping off.

As of this writing, Luce Emerson did not hold a position in any of the aforementioned securities.