Business Essentials for Professionals


Analysts Confident Of Netflix Fending Off Impending Rivalry From Disney And Apple

Analysts Confident Of Netflix Fending Off Impending Rivalry From Disney And Apple
At a time when the tag of being a market leader of fir Netflix is being threatened by new comers in the industry such as Apple, Disney and Amazon, the streaming service company is set to launch the Season 3 of Netflix's Queen Elizabeth II drama "The Crown" later this month.
But investors are tending to stick with Netflix as believe that the company will be able to weather the threat.
A better than expected earnings report has seen a rebound in the shares of the company by more than 10 per cent since late October.
And in order to stay ahead of the competition, a pledge to offer even more new programming is being made by the company CEO Reed Hastings.
"We plan on taking spend up quite a bit," Hastings told attendees at the New York Times' DealBook conference. While accepting that customers are also likely to subscribe to many various streaming services, Hastings believes that the most spending will be done by consumers on Netflix.
In addition to justifying the company decision to raise subscription prices, that it did earlier this year, which will be more than that of rivals, Hastings will also need to showcase more hit shows so that customers remain hooked to the service.
The cheapest plan of Netflix is $8.99 a month while its standard plan comes at $12.99 the its premium plan at $15.99.
The services of Apple TV+ has recently been launched by the most valuable public company in the world Apple that has a monthly price tag of $4.99 while also including hit series featuring the likes of Jennifer Aniston and Reese Witherspoon, Jason Momoa and a Book Club show from Oprah Winfrey. On the other hand, the Disney+ streaming service will be launched by entertainment giant Disney on November 12 that will cost only $6.99 a month and will include a wide range of contents such as those from the classic Disney titles such as "Snow White and the Seven Dwarfs" and "Fantasia" and super hit movies from its Pixar, Marvel and Lucasfilm studios.  
With such competition in content and in price, the new comers into the streaming industry are bound to make Netflix investors nervous. Netflix is already battling stiff competition from Amazon and its Prime Video service and Hulu’s service backed by Disney. A few more streaming services are scheduled to be launched next year which include the ones from HBO called HBO Max and Peacock from Comcast -owned NBC Universal.
On the overall so far this year, the share price of Netflix has grown by just 10 per cent. While it is a healthy gain, the number is nowhere close to the 28 per cent gains made by Nasdaq as well as the 20 per cent growth in price of Disney's shares.
And among the so called FAANG stocks, Netflix is the worst performing. So far this year, there has been a 45 per cent rise in Facebook’s stocks while a 65 per cent surge in Apple’s share prices. Google owner Alphabet’s share have gained about 25 per cent while those of Amazon have gained 20 per cent.
"We don't think it's hyperbole to dub the current environment 'Streaming Wars,'" said Jeffrey Wlodarczak, an analyst with Pivotal Research Group, in a recent report. But Netflix "will remain a must have for most consumers, will benefit from a potential acceleration away from PayTV [and] is unencumbered by a legacy business to protect," he added.
And then there are some analysts who believe that the international growth of Netflix will continue to offset any shortcoming because of the increased competition.
Netflix has more "potential upside" because of its focus on local language content. For example, Germany's "Dark" and Spanish-language shows "La Casa de Papel" and "La Casa de Las Flores" have been great hits, said CFRA analyst Tuna Amobi.

Christopher J. Mitchell

Markets | Companies | M&A | Innovation | People | Management | Lifestyle | World | Misc