Netflix, Inc. Add to portfolio

There's a lot of anxiety in the Netflix(NASDAQ: NFLX) bull camp as we head into Tuesday afternoon's release of the streaming video pioneer's fourth-quarter results. Netflix has only one rival to worry about as it sneaks a peek at the rearview mirror -- and that happens to be the mouse-ears-donning Disney+. Netflix has also come through with four price hikes since 2014, proving mortal only after the final increase in the springtime of last year. If we're going to worry about Netflix not playing the starring role in the future of streaming, it will come at the expense of a better mousetrap. It's keeping folks glued to their streaming sticks, and that's not good news for Netflix if it's coming at the expense of engagement for the top dog. However, if Disney+ is coming at the expense of traditional television consumption -- encouraging more folks to cut the cord tethered to their cable or satellite television -- it would naturally benefit Netflix.

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Comcast-owned European pay TV giant Sky and Netflix early on Sunday London time unveiled a new multi-year integration deal in the U.K. "Strengthening their successful partnership built over the past two years," they said the extended deal "will help Sky to bring customers all of the entertainment they love, all in one place." The deal is the latest for Sky in a series of agreements with key content partners, including the BBC, Channel 4, Channel 5 and WarnerMedia. "In one seamless service, users are able to access all the great TV and film Sky offers, including Sky original productions like the award-winning Chernobyl, great new shows like The Third Day, and returning series like Save Me Too, alongside Netflix’s original dramas, films and documentaries, which include The Witcher, The Irishman and a brand new [season] of Sex Education, which is filmed in Wales," Sky said on Sunday. “Our customers love Netflix content and our partnership continues to go from strength to strength; we plan to launch new channels and genres, start building our new studio, Sky Studios Elstree, and we’ll have great new and returning Sky originals too.

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Netflix and Disney Investors Have No Need to Worry About NBC's Peacock | NASDAQ. If you produce and own video-based content, launching a streaming service has become something you seemingly need to do. Walt Disney (NYSE: DIS) has not released subscriber numbers for its Disney+ service, aside from noting that it had quickly passed 10 million paying customers, but external signs (like downloads of its app) suggest that the service has been a major success. Disney has used its extensive library and The Mandalorian, the first live-action show set in the Star Wars universe, to build its audience. Even with its impressive lineup of intellectual property (IP), Disney knew that it was entering a tough market, so it priced its service at $6.99 a month -- slightly more than half of the $12.99 Netflix charges for its standard plan. Comcast seems to know that it faces an uphill battle for customers because it's offering Peacock for less than what its rivals charge -- and many consumers will get an ad-supported version of the service for free.

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It's been a little more than a year since Netflix(NASDAQ: NFLX) announced its plans to increase its subscription rates by as much as 18%. Last year's move was the largest on a percentage basis. And given the rapidly evolving competitive climate since then, it may be a long time before Netflix has the pricing flexibility to push out another price pop. "There will come a point where people will say 'no mas,' but until they get to that point, you're going to see Netflix nickel and dime about every year or so and adjust their prices higher," I said at the conclusion of that segment. Disney's $6.99-a-month pricing (with big discounts for folks paying a year or more in advance) helped Disney+ top 10 million subscribers by the end of its first day on the market. Even before the launch, the Netflix price increase that kicked in during the springtime of last year resulted in back-to-back quarters in which the longtime market darling failed to live up to its earlier subscriber guidance.

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In the most recent quarter, the company reported more than 158 million accounts worldwide, and said it expects to close out the year with about 166 million subscribers. While its domestic growth is slowing, Netflix's most impressive growth came from international locales, which grew 33% year over year to nearly 98 million. There remains a significant untapped global opportunity that Netflix is just beginning to harvest, and at least one analyst believes the company's strategy will enable Netflix to double its subscribers within the coming five years. He believes that Netflix has already embarked on a path that will increase its penetration in important geographical locations -- namely EMEA (Europe, Middle East and Africa) and the Asia Pacific regions -- ultimately doubling its subscriber base. The common thread among all these predictions is that the tech giant's international growth is just getting started. If only it were that simple... While there's certainly a case that Netflix could hit these lofty subscriber goals, it's worth noting that the company isn't simply going to waltz in and be the leader.

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Many investors are worried big global launches of streaming services from Disney(NYSE: DIS) and AT&T's (NYSE: T) WarnerMedia will cut into Netflix's (NASDAQ: NFLX) user growth going forward. But there's at least one analyst who thinks the streaming leader is still extremely under-penetrated in certain markets and could nearly double its subscriber count by 2025. Subscriber additions will be driven by improved penetration in each of Netflix's reporting segments, but particular strength will be showcased in the Europe, Middle East, and Africa (EMEA) and Asia-Pacific regions. For comparison, Disney's outlook for Disney+ is to reach 90 million subscribers by 2024, although early success suggests the company may have underestimated the streaming service's appeal. Devitt estimates Latin America, EMEA, and Asia-Pacific will together represent a target market of more than 600 million households by 2025. In order to improve its market penetration, Netflix is investing heavily in non-English language content. Netflix is notably making a concentrated effort to attract Indian consumers, with plans to invest 30 billion rupees (about $420 million) in developing and licensing content for the Indian market over the next two years. Neither Disney nor HBO have announced region-specific programming for their services despite their global ambitions.

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Up until now, broadcasters and cinemas have tended to be the ones to subsidise local content. Now France wants to shift the burden to streaming firms, which have faced fewer demands in the past. Obligations for streaming firms to invest in local content are in line with a recent EU directive on audiovisual media services, which are undergoing a facelift in Paris. When Culture Minister Franck Riester unveiled a reform to modernise the audiovisual sector last year, he threatened to go as far as blocking streaming sites that refuse to comply with investment requirements. Those offering a wide variety of programming will have to invest at least 16 percent of their revenues in local content, and streaming sites that offer mostly TV series and films, a category including both Netflix and Amazon, will have to put at least 25 percent of their revenues to local productions. Foreign competition.

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Netflix(NASDAQ: NFLX) is a controversial stock in the investment community for several reasons, not least of which is the increasing number of rival offerings from Disney(NYSE: DIS), Apple(NASDAQ: AAPL), AT&T's HBO Max, Comcast's Peacock, and others. Some of Netflix's licensed content has already been pulled from the service as it finds its way to those competing platforms. Its argument is that there is already plenty of competition in the marketplace, from the likes of Amazon Prime Video, Hulu, HBO, YouTube, cable television, and even gaming. Therefore, additional competition would be unlikely to make a meaningful difference for Netflix. That revenue growth increases the company's ability to spend even more on content, which makes Netflix an even better service, which leads to even more subscriber gains, and the cycle repeats. That's Netflix's flywheel, and that's why subscriber engagement is so important to the company. So even if there hasn't been any impact on actual subscriber retention since Apple and Disney rolled out their services, if there's been a noticeable dip in engagement, it could be a leading indicator of issues to come.

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Chicago, IL – January 16, 2020 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Despite the recent setbacks, NFLX is still the world’s largest streaming TV platform. But Disney, Apple and plenty of others have more money than Netflix and streaming is only part of their businesses. Overall, the last year has been rough for Netflix stock. But it was still one of the best performing stocks of the 2010s, up over 4,000%.

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Netflix (NFLX) to Post Q4 Earnings: What's in the Cards? Netflix Inc. NFLX is set to report fourth-quarter 2019 results on Jan 21.The company forecasts fourth-quarter earnings of 51 cents per share, implying year-over-year growth of 70%.The Zacks Consensus Estimate is currently pegged at 50 cents per share, down 3.8% over the past 30 days but indicates 66.7% growth from the figure reported in the year-ago quarter.Moreover, total revenues, including the DVD business, are anticipated to be $5.44 billion, up 30% year over year and in line with the consensus mark.Notably, the company’s earnings have beaten the Zacks Consensus Estimate in the trailing four quarters, the average positive surprise being 26.4%. Apple AAPL launched its much-anticipated Apple TV+ on Nov 1, followed by Disney’s DIS Disney+ on Nov 12.Furthermore, Amazon AMZN has been taking initiatives to fortify presence in the global streaming space through its prime video service.The stiff competition might have had a negative impact on Netflix’s subscriber base. The media giant will give its next subscriber update with first-quarter fiscal 2020 earnings on Feb 4.Moreover, per Sensor Tower data, Disney+ — which has been downloaded nearly 41 million times across the App Store and Google Play — witnessed $97.2 million in user spending during the first 60 days of launch.Zacks RankNetflix currently has a Zacks Rank #3 (Hold).

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