When the so-called ‘streaming wars’ commenced back in November 2019 with the launch of Apple TV+ and Disney Plus, it was thought that new competition was going to put pressure on the Netflix Inc’s (NASDAQ:NFLX) stock. However, the world’s biggest video streaming service has not felt much pressure, and in 2020 so far, it has gained 13.50%.
In this regard, it should be noted that in 2019 the company had underperformed, and even though the stock has not been affected, there are some things that need to be pointed out. For instance, in the fourth quarter, the company added 400,000 new subscribers, which fell short of its projections of 600,000.
At the end of the day, the continued addition of new subscribers is the most important part of the company’s business. In the first quarter, Netflix has projected that it is going to add 7 million new customers, but that falls short of Wall Street’s expectations of 8 million. In addition to that, the competing services are adding subscribers at a decent clip, and new services like HBO Max, as well as Comcast’s Peacock, are coming soon. Analysts believe that the international markets are going to be one of the most important battlegrounds for the streaming industry.
In that regard, Netflix is an established player globally, and many of the competing services are still to expand into those markets. Disney has announced plans to expand and believes that it will have 80 million to 90 million customers in a few years. However, that is well short of the number of subscribers that Netflix boasts of.
Last but not least, the company’s negative free cash flow soared to as much as $3.5 million in 2019, and the company expects to scale it down to $2.5 billion this year. Analysts believe that despite the new competition, the stock has what it takes to hold firm in the near future.