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Survey: Disney, Apple May Not Pose Big Risk To Netflix

Survey: Netflix Subscribers Will Stay Put, Avoid Disney, Apple Services

A new survey suggests that Netflix users won’t jettison the service when new offerings from Apple and Disney launch in the next few weeks, and if anything, users may add multiple services and spend less on traditional TV.

CNBC is reporting on a survey by Piper Jaffray, which has a glowing forecast for the streaming service’s stock. The company said that concerns over competitors might not be as serious as initially thought. 

“Our survey suggests that the majority (~75 percent) of Netflix subscribers do not intend to subscribe to either Disney+ or Apple TV+. For those that do expect to use one of these offerings, the vast majority expect to also maintain their Netflix subscription,” Piper Jaffray analyst Michael Olson said.

Shares in Netflix dipped 1.1 percent in Wednesday (Oct. 2) trading, down from $269.58 a share. Piper Jaffray still has an overweight rating on the stock with a target of $440 a share, which is around 64 percent higher than where it is currently. 

The company surveyed about 1,500 Netflix subscribers and discovered that most won’t leave Netflix behind. 

“Most existing Netflix subscribers appear to be trending towards multiple streaming video subscriptions, especially as many continue to reduce their spend on traditional TV offerings,” Olson said.

The new offerings have prompted alarms from Wall Street over Netflix’s long-term viability in terms of losses and market share. Earlier this year the outlook for Netflix was rosy, but it’s dropped about 30 percent in stock value since July. 

Other risks facing Netflix are increasingly rising costs for licensing and the loss of pricing power. Amazon is also gaining ground, and it recently added live NFL games to its roster. However, Piper Jaffray believes that those competitive markers are now built into the price of the stock.

“NFLX now trades at multi-year valuation lows, suggesting shares reflect much of the upcoming competition risk and periodic sub add volatility,” Olson said.

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