Video streaming service provider Netflix has officially dethroned Disney as the world's largest entertainment company. With its theme parks and movie productions all shut down due to the coronavirus pandemic, Disney has lost a lot of its market value. Meanwhile, Netflix's stock prices are surging as people stuck at home flock to its services for entertainment.

Online video streaming use had exploded in recent months as the world hunkers down to mitigate the spread of the coronavirus pandemic. In the US, video streaming had surged by more than 109 percent in March alone. The added subscribers has resulted in Netflix's stock prices climbing up to new heights, reaching a record price of nearly $427 per share on Wednesday.

The continued surge in its stock prices has now sent Netflix's market valuation to around $194 billion, a $50 billion increase since the start of the year. The increase in its stock prices is good news for its co-founder and CEO, Reed Hastings, whose net worth had climbed by $1.2 billion to $4.9 billion. On Wednesday, Netflix's stock prices climbed by a further 5 percent, while Disney dropped down by 2.5 percent.  

Since the start of the year, Disney has lost more than $74 billion in market value, dropping from nearly $258 billion at the end of 2019 to only about $184 billion as of this week. While Netflix and Disney are both heavily focusing on the entertainment industry, each company does have different business models.

Netflix is solely dependent on paid subscriptions for its video streaming service for revenue, while Disney has a much wider source of income. Disney is heavily reliant on tourism and merchandise sales as well as revenues generated through its theatrical releases. The diverse source of income is traditional advantageous but it is proving to be a liability for Disney amid the crisis.

Disney recently rolled out its own streaming platform, called Disney Plus, to compete with Netflix's service. However, given its relative infancy, the platform has yet to reach the same scale as Netflix's operations. Revenues generated from the platform is unfortunately not enough to offset Disney's growing losses from the shutdown of its theme parks and the delays of its movie releases.

Analysts have pointed out that overtaking the more than a century-old media giant is an amazing feat for the less than a decade-old California-based video streaming service provider. The pandemic has presented Netflix with a unique growth opportunity that is a stark contrast to the fates of other businesses, which have majorly suffered from the global health and economic crisis.