Netflix’s second consecutive ruinous quarterly forecast and the shuttering of CNN+ is making Wall Street wonder if streaming services are a good investment in general.
Netflix Inc.’s second consecutive ruinous quarterly forecast pummeled the stock this week — $50 billion in market capitalization disappeared in one day alone — and also made Wall Street wonder if streaming services are a good investment in general.
Rich Greenfield of Lightshed Partners also weighed in on subscription video-on-demand, or SVOD, in a Thursday note: “With [a total addressable market of 500 million to 1 billion subscribers globally] in question, increasing competition from tech giants who do not care about the short-term profits of SVOD and the need to constantly retain users with must-see programming , it is becoming clear that the profitability of SVOD may not be nearly as compelling as investors hoped and certainly nowhere...
“Consumers are more discretionary in their spending, which would help Disney, which is more hedged by the Disney bundle,” Erickson said. Consumers are voting for ad-supported services with their click finger, and they have an abundance of content to choose from, Mark Vena, principal analyst at SmartTech Research, told MarketWatch. Netflix must also contend with specialized content from Disney , Apple and FuboTV Inc. while maintaining its “everything for everybody” approach, he added.
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