Netflix Stock Falls After Verizon Announces Giveaway With Disney Plus
Netflix News OTT

Netflix Stock Falls After Verizon Announces Giveaway With Disney Plus

Netflix Stock
Pritish raj
Written by Pritish raj
[email protected] | Noida | Published on: October-23-2019 05:48 PM

Netflix investors, already skittish about Disney and Apple’s imminent entrance into the lucrative streaming space, forced the stock down on Tuesday morning trading by as much as 4 percent. The drop came after Verizon announced an agreement with Disney to provide all prepaid mobile subscribers and existing Fios broadband and 5 G home wireless internet customers with Disney Plus for 12 months free.

Netflix stock closed on Tuesday at $266.69 per share, down 4.1 percent. Disney’s stock closed for the day at $132.40 a share, up 1.6 percent.

Verizon estimates it has about 50 million — and that— U.S. mobile customers on unlimited plans that are qualifying for one year’s Disney Plus free.

When announcing mixed results for the third quarter last week, Netflix tried to downplay the competitive pressure it expects from the release of Disney Plus (Nov. 12) and Apple TV Plus (Nov. 1), saying in its letter to shareholders that the new services might trigger “some modest headwind to our near-term growth.”

CEO Reed Hastings, on the company’s Oct. 16 video interview, insisted that “fundamental” Both video games “compete with linear television,” Hastings added and asserted that the subscription VOD services don’t really compete with each other as much as traditional pay-TV.

The debate about how the direct-to-consumer streaming strategy of Disney could impact Netflix has been going on since Disney announced the end of its 2017 pay-TV contract licensing deal with Netflix (covering the U.S. and Canada).

Analysts who are positive about the future for Netflix have purchased into the idea that the SVOD market is not a game of zero-sum.

“We remain bulls on the Netflix story as the global OTT market remains significantly underpenetrated and Disney+’s entry is likely to accelerate the trend away from traditional pay television,”

Disney Plus- Next Big Brand

Netflix’s Q3 marginally undershot domestic subscriber growth goals for Q3, but the miss wasn’t nearly as bad as the previous quarter. For its U.S. streaming customer base, the company posted revenue up 31 percent year-over-year and reported a 16.5 percent increase in average revenue per customer (ARPU).

Netflix expects 7.6 million net adds billed globally for the fourth quarter of 2019, with 600,000 in the U.S. and 7.0 million for the global portion. Wall Street had predicted Netflix to add up to 9.3 million net new paid subscribers (2 million U.S., 7.3 million overseas), and some analysts speculated that the streamer’s expected growth was low-balling due to the new competitive environment.

Netflix’s stock dipped last month after Hastings revealed that he saw “tough competition” from the streaming wars coming from new entrants. “While we’ve clashed with many people over the past decade, it’s a whole new world beginning in November… between Apple’s launch and Disney’s release, and Amazon’s ramping up, of course,” Hastings said at a conference in Cambridge, UK. (The “whole new world” comment was meant to be a cheeky nod to Disney’s “Aladdin.”) On Monday, Netflix unveiled plans to raise another $2 billion through a bond sale, raising its long-term debt burden to over $14 billion.

About the author

Pritish raj

Pritish raj

Pritish Raj is a content writer at Next Big Brand. Hailing from the diversified state of Bihar, he is an engineer by education who chooses the way of poetry, photography, and writing to kick off his career.
Highly enthusiastic about brands and startups, he aims to be a travel content creator.

9113327413 | A-73, Hackerspace, Noida sector- 2 Noida UP 201301

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.