Last year as the pandemic raged, Wall Street bet against exhibition and embraced streaming. Now, with moviegoing surging again, analysts are down on Netflix.
Benchmark Capital analyst Matthew Harrigan just lowered Netflix shares from “hold” to “sell.” Why the flip-flop? Not only is soaring inflation forcing consumers to cut monthly spending, but Harrigan also reminded us, “The continued negative Netflix press glut, relating to member losses, and even Prince Harry and Meghan, is a mild growth albatross.”
Media reports claim Netflix is very unhappy with how little it’s gotten back thus far from its mega-rich deal with the ex-working British royals, who flew home to California by private jet after London’s Platinum Jubilee without inside film footage or stills of themselves as the Queen met her new great-granddaughter Lilibet.
Harrigan noted Netflix competitors like Disney & WB Discovery have “significantly deeper IP libraries” to drive their streaming services. This could make it difficult for Netflix to trim spending to produce U.S. content, he said, “as competition gains traction, while aggressively investing in Asian growth markets, especially India.
Meanwhile, Michael Nathanson at Moffett Nathanson projected U.S. ad revenues by 2025 for Disney+ would hit $1.8B vs. $1.2B for Netflix’s upcoming ad-supported lower-cost subscriber tier.