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But investors seem to think that Netflix will withstand the threat.
And CEO Reed Hastings has vowed to offer even more new programming to stay ahead of the competition.
But Hastings will need more hit shows to keep subscribers interested — not to mention to justify the fact that Netflix, which raised its subscription prices earlier this year, costs more than its rivals.
Netflix’s cheapest plan is $8.99 a month. The standard plan is now $12.99 and its premium offering costs $15.99.
More streaming competition at lower prices
Disney+ will cost only $6.99 a month and features content ranging from classic Disney titles like “Snow White and the Seven Dwarfs” and “Fantasia” to movies from its Pixar, Marvel and Lucasfilm studios — as well as new shows tied to Marvel characters and the Star Wars spinoff “The Mandalorian.”
Those fears are a key reason why Netflix has lagged the broader market this year.
International growth could help Netflix rebound
Investors may be overreacting. Netflix still has huge exclusive hits like “Stranger Things” and is also making a big push into movies. Martin Scorsese’s latest epic — “The Irishman” — will stream on Netflix later this month following a limited release in theaters.
“We don’t think it’s hyperbole to dub the current environment ‘Streaming Wars,'” said Jeffrey Wlodarczak, an analyst with Pivotal Research Group, in a recent report. But he added that Netflix “will remain a must have for most consumers, will benefit from a potential acceleration away from PayTV [and] is unencumbered by a legacy business to protect.”
Netflix’s stock’s underperformance compared to rivals “has created an attractive opportunity,” he said.
Several analysts are also betting that Netflix’s international growth will continue to boost the stock — even as the US market becomes more competitive.
Nomura Instinet analyst Mark Kelley raised his price target on Netflix to $330 (about 15% higher than the current price) after its latest earnings report, citing solid growth in subscribers and revenue outside of the US.
CFRA analyst Tuna Amobi also touted the momentum overseas, pointing out in a note that Netflix has more “potential upside” due to its bets on local language content. Germany’s “Dark” and Spanish-language shows “La Casa de Papel” and “La Casa de Las Flores” have been breakout hits.
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