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Proprietary Data Insights Top Entertainment Stock Searches This Month
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Deja Vu All Over Again With Netflix (NFLX) second to meme stock AMC Entertainment (AMC) in our proprietary Trackstar database of the tickers investors search for most, The Juice got to thinking about the theory we floated in April. That Netflix decided to run part two of the latest season of Stranger Things on July 1st. On day one of Q3 rather than the last day of Q2. As to stem the massive multi-million subscriber loss it warned investors on. Turns out we might have been onto something. But it’s not all bad news for Netflix. More on that in a second, but first. Remember when we all cut the cable-TV cord in favor of streaming. It was supposed to make everything easier and cheaper. We could watch whatever we want whenever we want and pay less for the privilege. Not so fast. As we’ll detail in a minute, if you’re a sports fan, you still have the cord effectively wrapped around your neck. One way or another. If you’re a sports fan who likes to watch other stuff on television, even worse. You probably spend more money (or thereabouts) on streaming than you did your old cable package. Or maybe you caved in and have both – multiple streaming services and cable television. It’s not cheap. If you subscribe ad-free to, say, HBO Max, Netflix, do a bundle that includes live TV channels, Disney+ and ESPN+ with Hulu, and subscribe to the NBA Season Pass, you’re on the hook for at least $135 a month. Add in a premium Comcast or Spectrum cable package and you’re coming up on, if not surpassing $200, easy. |
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Streaming |
Netflix Isn’t Dead Yet, Or Is It?
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Key Takeaways:
Turns out Netflix’s Q2 subscriber loss was considerably smaller than the two million the company warned us about. In Q2, Netflix lost just 970,000 subscribers. And, according to Nielsen, Netflix beat out all other streaming services for July 2022 market share: However, this is thanks, in large part, to the July 1 debut of Stranger Things season four, part two. Netflix gained 8% market share in July. In the month, viewers watched 18 billion minutes of Stranger Things. Between shows Virgin River and Umbrella Academy, Netflix collected another 11 billion or so worth of streaming minutes. This blows away the competition. For example:
Across the board, streaming use increased 3.2% between June and July and 22.6% year-over-year. This strength led to a first. A huge streaming milestone. For the first time ever, streaming viewership was greater than cable television viewing. Why? Largely because there were less sports to watch in July. Thanks to the end of the NBA and NHL playoffs, sports viewing was off 41%. Back To Netflix Riding the Stranger Things wave, Q2 wasn’t as bad as Netflix warned. Thanks to part two, The Juice thinks Q3 will look reasonably good as well. In fact, Netflix has guided to 1 million net subscriber additions for the current quarter. It’s Q4 when things could get interesting and potentially ugly again for Netflix. We’ll just have to stream and see. The Bottom Line: Netflix is one of the few stocks that represents a pure play on streaming. Over time, this could change depending on how much revenue the company can generate when it starts accepting advertising. If you want some exposure to the streaming revolution that’s in full force and only growing, you might be better off with more diversified businesses such as Disney (DIS) or Alphabet (GOOG)(GOOGL). These stocks have managed to be something closer to, if not outright blue chips. It will take Netflix a while to achieve that status – or even close to it – if it ever does. First, it needs to diversify its business. Which, out of necessity, it’s in the process of doing. Could be a blessing in disguise that Reed Hastings and company had to give in and plan to run some commercials. Second, Netflix’s stock price is volatile and tied too closely to that subscriber number. Yes, the stock’s up about 22% over the last month, but down a rough 59% year-to-date. Netflix’s 2023 could ride on Q3 coming in as expected – or stronger – and the bottom not falling out again in Q4. |
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