Bank foresees “weak” Q1 from Netflix

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Comments from media analysts at investment bank Exane/BNPP suggest that Q4 results from Netflix were very much in line with expectations, and certainly few could complain at paid subscriptions growing 21 per cent year on year.

Globally the streaming service beat net paid additions expectations by adding of 8.8 million in the quarter-year, vs consensus expectations of 7.6 million.

But the bank is a more concerned at the current Q1 performance of Netflix which it describes as “weak”.

“Netflix attributes the strong performance to the slate of original programming and wider streaming adoption globally. While the group posted Q4-record paid net adds in EMEA, LatAm and APAC, US/CAN paid net adds were much weaker y-o-y and explained by the intensifying competition in the US particularly. The group also underlined the recent price changes as a reason for the softer performance,” says the bank.

“Overall this year should follow a seasonality more in line with 2018 than 2019 driven by the Q2 content line-up and the timing of the price increase last year. In terms of operating margins the group is forecasting 16 per cent in 2020 (+300 basis points y-o-y),” adds the bank’s note to clients.

Exane/BNPP expects Netflix’s growth to be supported by continued content investment and price hikes. However, Q4 clearly showed that competition is impacting even Netflix, by any measure the streaming market leader. Accordingly, the bank also expects the launch of new VoD platforms in Europe to put further pressure on broadcasters’ own SVoD platforms.


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