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Netflix’s Stocks Plunged

Netflix shares plunged 30.2% from its last peak on July 10 through the close on September 23. On July 18, shares dropped 10.2% following Netflix's second quarter earnings for 2019 the day before, which reported worse-than-expected subscriber additions.
25 Sep 2019 15:08
Netflix’s Stocks Plunged

Netflix’s stock plunged over the past several months, hammered by fears of increased competition from other streaming rivals.

This is as a result of new, propelling streaming platforms, like Disney+ and Apple TV+ who have more to offer into this industry and era, CNN Business reports.

Netflix had the first-mover advantage in the industry, with substantial growth in both subscribers and revenue since it rolled out streaming in 2011.

However, with Disney+ and Apple TV+ set to offer streaming at a much lower price point, Netflix may not be able to replicate its past phenomenal growth.

Netflix shares plunged 30.2% from its last peak on July 10 through the close on September 23. On July 18, shares dropped 10.2% following Netflix’s second quarter earnings for 2019 the day before, which reported worse-than-expected subscriber additions. Netflix stock turned negative for the year Monday, and is down 0.7% year-to-date as of Monday’s close.

“Expansion costs money, and they are burning a lot of cash internationally on infrastructure, which is so poor that they’re not even close right now,” Wedbush analyst, Michael Pachter says.

Subscriber growth is an important part of its business model, but Netflix’s performance is no longer driven by subscribers. The popularity of its content drives Netflix’s success. To attract subscribers internationally, it needs to have a broad content library that caters to the preferences of a diverse audience.

While much of Netflix’s US content has global appeal, it is unclear how much the content developed for other countries or regions appeals outside of that specific geography.

“It’s a whole new world starting in November,” Netflix’s CEO Reed Hastings said.

Apple TV+ will launch November 1, it will will include shows like like ‘The Morning Show’, ‘Dickinson’, and ‘For All Mankind.’

Apple TV+ is making its service free for over one year on purchases made from Apple products or $4.99/month otherwise.

Disney+ is planning its launch days after, on November 12 with a dent to Netflix’s subscribers list.

Disney+ has even offered a sign-up deal that will get their subscribers three years of streaming price for the price of one.

Their channel will contain exclusive TV shows from the company’s major brands: Disney, Pixar, Marvel, Star Wars, and National Geographic. This will be $6.99/month.

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