Netflix will see a "slow bleeding" content: Analyst

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Netflix News & nbsp;(NFLX)& nbsp; lose his two most watched shows – "friends"(To WarnerMedia HBO Max in 2020) and" The Office "(serving NBCUniversal in 2021) – does not mean the disappearance of the main streaming service.At least not yet." Data-reactid = "15"> L & # Netflix news (NFLX) loses its two most watched shows – "Friends" (for WarnerMedia's HBO Max in 2020) and "The Office" (for NBCUniversal's service in 2021) – does not mean the disappearance of the main streaming service, at least not for the moment.

"This is probably not as fatal for Netflix as the titles may seem," says Michael Pachter, an analyst at Wedbush, in Yahoo Finance's "The First Trade." "I do not think it's good for Netflix, but I do not think they'll do it … lose a ton of subscribers immediately."

Instead, Pachter is planning a "slow bleeding" for the streaming giant. "If Disney, Comcast and Warner get all their content [off the platform]Netflix will lose about 60% of its content, "says Pachter. This announcement is bad news for Netflix over the next four to five years.

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<h3 class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "'Stranger Things' to the rescue"data-reactid =" 38 ">'Stranger Things' to the rescue

The prospect of seeing networks remove their best titles is no surprise to Netflix. The streaming service, which has 148 million subscribers worldwide, anticipated the move. This is one of the reasons the company spends feverishly to attract and retain subscribers.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "This investment seems to pay off when it s" acts at & nbsp;supernatural thriller "Stranger Things"."data-reactid =" 40 "> This investment seems to pay off when it is the supernatural thriller" Stranger Things ".

<p class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "On Monday, Netflix & nbsp;tweeted& nbsp; 40.7 million accounts have watched the show since its debut on July 4th. This is a record for a movie or television series during its first four days on the platform. "Data-reactid =" 41 "> Monday, Netflix tweeted 40.7 million accounts have watched the show since its debut on July 4th. This is a record for a movie or television series during its first four days on the platform.

In addition, a survey conducted by Wallen Cowen & Co. revealed that about 51% of current Netflix users had the intention of watching "Stranger Things 3." Nearly 5% of consumers who do not subscribe to Netflix have the intention to subscribe to the service. to watch the show, while 13% of former Netflix members plan to re-subscribe to watch the third season of the show.

"We consider these figures to be particularly positive given the potential for gross growth. [subscription] additions at the end of 2Q19 and 3Q19 following the most publicized NFLX show, "Cowen & Co. analyst John Blackledge wrote on Tuesday in a research note.

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<h3 class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Cash consumption is a "serious problem""data-reactid =" 64 ">Cash consumption is a "serious problem"

Still, there is this "serious problem" of cash consumption, according to Pachter.

The self-proclaimed resident bear, Netflix, claims that the action belongs to "passionate idiots" and estimates that equities are worth about half of what they are currently trading. Its target price for Netflix is ​​$ 183. Shares traded over $ 379 on Wednesday afternoon.

"My price target is based on an honest and ethical view of what their cash should look like in the future, but I still give them $ 100 billion. I think the open question is, how do some of these Wall Street clowns rate that thing between $ 450 and $ 500, a value well under $ 200 billion? I think this speech is crazy. "

Netflix currently spends about $ 3 billion a year, because it spends a lot on original content. The Netflix Analysts Project will spend $ 15 billion on new programming this year, up from $ 12 billion in 2018.

According to Mr. Pachter, the only way Netflix can reach a market capitalization of $ 200 billion is to turn its negative annual cash flow into a $ 10 billion positive cash flow.

"You can not reach 10 billion positive dollars without a significant increase in prices and a significant increase in the number of subscribers," he says.

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