The streaming space has become increasingly competitive of late, with Disney and Apple joining the fray. While Netflix’s most popular plan is currently available for $12.99 a month, Disney+ is set to launch on November 12th for $6.99 a month. Disney will also offer its own bundle with ad-supported Hulu and sports streaming service, ESPN+, for $12.99 a month.
Looking At The Split
Experts on split on how the streaming media giant will fare moving forward.
“A lot of people are gonna sign up for Disney plus and Netflix, and I think it all boils down to the quality of the content. Netflix has some engaging content, right? Yes, streaming is a trend that’s going to continue to play out, but binge-watching, in my opinion, is the more important trend. That’s the addictive trend, and that’s what Netflix brings to the table. Is that addictive content. People want to sit in front of their TVs, and watch it over and over and over again,” Tepper added.
Growth has been a driver for Netflix, and with poor earnings investors become skittish.
“It’s really on revenue growth expectations. This is a company where it was trading at seven times revenue, but all the sudden you have a 40% missed in the quarter, and then people are looking at maybe instead of 30% growth on top line, you could be looking at high teens,” said Bernie McTernan, analyst at Rosenblatt Securities.
McTernan acknowledged the massive price increase Netflix recently instituted but doubts anything of that magnitude is coming down the pipeline anytime soon.
“We definitely think they’re going to take a pause near term in any massive price increase. The price increase they instituted this year was the greatest they’ve ever had. I think we are a long ways away from them doing such a massive price increase again but with global subscriber growth slowing, pricing is going to matter more and more. So you should see the mid-single-digit price increases, instead of like a 20% rate increases they took this year,” McTernan added.
