Since the launch of Walt Disney (NYSE: DIS) streaming service Disney+, Netflix (NASDAQ: NFLX) stock is up 4.7%. The bad news for Netflix stock investors is that shares are still down 19% year-to-date. And early positive feedback on Disney+ suggests cause for concern.

Disney+ is seemingly Netflix’s biggest streaming challenge to date. Disney+ costs just $7 per month, about half the price of Netflix’s standard $13 monthly plan.

Netflix stock bulls might argue that $13 per month for Netflix or $20 per month for both services isn’t too pricey given what Americans have paid for monthly cable service in the past. However, a new survey suggests Netflix may not have as much pricing leverage as some may think.

Retention Is an Issue

In October, Netflix told its investors it hasn’t been retaining its U.S. customers as well as it has in the past. The combination of dissatisfied customers and a wave of new streaming competition isn’t an ideal mix for Netflix stock investors.

KillTheCableBill conducted a survey of 1,000 customers who have recently canceled their Netflix subscriptions. The goal was to identify the reasons customers are leaving and assess what type of impact Disney+ could have on that trend.

The first red flag is that the survey found 63% of recent Netflix cancellations had been subscribed to the service for over a year prior to canceling. These are previously-loyal Netflix customers. They are not people who jump in and out of subscriptions or users who opted out following a free trial.

Only 17% of respondents said they plan to return to Netflix in the future. At the same time, 25% said they will never return.

Perhaps the most disheartening survey result is that nearly half (49%) of respondents said price was their top reason for canceling. In fact, price was the number one reason. That result doesn’t bode well for Netflix. The company has been raising its prices while competitors like Disney jump in and undercut them.

Analyst Take

Despite the troubling KillTheCableBill survey, Nomura Instinet analyst Mark Kelley has a more optimistic take on the outlook for Netflix stock.

Kelley says the hot start for Disney+ doesn’t seem to be negatively impacting Netflix’s domestic app download rates.

“In the week following Disney+’s launch, Netflix app downloads grew +4% [year-over-year] vs. the prior 26-week average of flat YoY (though decelerated from +16% YoY growth the week before the Disney+ launch),” Kelley says.

Kelley says competition will likely continue to be an overhang for NFLX stock. He says content and pricing will be key, but consumers may not be forced to choose just one service.

“We do not view the streaming war to be a zero-sum game, as consumers have the budget to subscribe to multiple [direct-to-consumer] platforms,” Kelley says.

In addition to competition, Kelley says Netflix’s valuation and balance sheet are also concerns. He predicts the company will likely continue to need regular debt financing for the foreseeable future.

Nomura Instinet has a “neutral” rating and $330 price target for NFLX stock.

The Real Threat to Netflix Stock

As I wrote prior to the Disney+ launch, it may take a while for Netflix to see just how much of a threat Disney is. And I’m not talking about fourth-quarter Netflix earnings in February.

Nearly half of recent Netflix defectors said pricing was the reason. A similar recent survey by Bank of America found 40% of current Netflix subscribers say the service is already too expensive.

In addition to the potential $20 per month many customers are now paying for Disney+ and Netflix, the majority of those households are also paying $13 per month for Amazon Prime. Amazon Prime also provides access to Prime Video streaming.

A price of $33 per month is fine for many Americans in a booming economy with near-record-low unemployment. But Disney’s real threat to Netflix may not rear its head until the next economic downturn.

When Americans start looking to trim their budgets, which service are they going to cut? Americans aren’t giving up their precious Amazon Prime delivery. Are they going to cut their $7 per month Disney+ service and deal with their screaming kids losing their favorite Disney shows? Or are they going to cut the $13 Netflix subscription and save twice as much money?

Assuming no pricing changes for the three services, I’d be willing to bet Netflix loses market share to Disney during the next economic downturn.

Unfortunately, NFLX stock investors may not know just how much of a long-term threat Disney poses for years. Until then, investors should be extremely cautious about Netflix stock.

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