As Netflix’s Stocks Drop, CEO Acknowledges Hefty New Competition

netflixNetflix stocks dropped 10% over the past week closing at $270.75 on Friday. Shares were trading for more than $300 before the second quarter before Netflix saw it’s first decline in domestic subscribers in almost 10 years.

“While we’ve been competing with many people in the last decade, it’s a whole new world starting in November,” Netflix CEO Reed Hastings said in an appearance at a Royal Television Society conference in Cambridge, England, according to multiple press reports. “It’ll be tough competition. Direct-to-consumer [viewers] will have a lot of choice.”

He’s right: Apple TV+ and Disney+ both go live in November, with WarnerMedia’s HBO Max and NBC Universal’s Peacock to follow in the spring of 2020. In addition, Netflix will be the most costly subscription with the majority of subscribers signed up for the standard $13 a month package. In contrast, Apple TV + will cost just $4.99 a month.

But in a report to clients on Thursday, Todd Juenger, an analyst with Bernstein Research, didn’t sound worried about Netflix’s future.

“The belief that new services will take market share from Netflix rests on an assumption that the services will compete with each other for a fixed number of potential subscribers. We don’t believe that’s true,” Juenger wrote. “We do not believe the launch of additional SVOD services will cause existing Netflix subs to cancel, or future Netflix subs to not materialize.”

Juenger said with Netflix giving up staples like “The Office” and “Friends,” it can spend more money on creating original content.

Source: Deadline

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