The recent revelation that streaming behemoth Netflix lost subscribers for the first time in more than 10 years stunned Wall Street, spurring a massive sell-off of the company’s stock.
Inflation, subscription price increases, more competition, password sharing and the war in Ukraine were factors in the surprise announcement in the company’s first-quarter earnings. Still, it forced analysts to ponder whether the media companies going toe-to-toe with Netflix will rethink the billions of dollars they are investing in their own services.
“The business model isn’t as attractive as once thought due to the intensifying competition for time, attention and consumer spending,” wrote Robert Fishman and Michael Nathanson of MoffettNathanson in a recent report. The firm recently lowered its target stock price for Walt Disney Co., Paramount Global and AMC Networks.
