Can Netflix (NFLX) put a stop to its stock’s downward spiral? Netflix stock fell 1.78% on Monday and entered negative territory for the year. Meanwhile, Netflix rival Walt Disney (DIS) began taking preorders for its Disney+ video service.
Disney+, set to launch November 12, is one of Netflix’s new competitors in the subscription video market. Disney now allows people to preorder Disney+ in advance for $6.99 per month or $69.99 per year. The service has been priced competitively in an apparent attempt to shake Netflix’s tight hold on the subscription video market.
Netflix charges $8.99 per month for its basic plan and $12.99 per year for its most popular plan. However, not all Netflix customers are happy with those fees. For example, a Kill the Cable Bill study shows one-quarter of US Netflix subscribers believe the service is too expensive. Netflix could be vulnerable as rivals Disney and Apple launch cheaper video services. Apple is set to launch its Apple TV+ video service on November 1 for just $4.99 per month.
Netflix stock under pressure from subscriber miss and show losses
The Disney+ preorder kickoff is only the latest pressure on Netflix stock. Several factors have pressured the stock in recent months. In July, Netflix’s second-quarter results missed both its own and Wall Street’s subscriber growth targets. In fact, Netflix reported a surprise loss of about 130,000 US subscribers in the second quarter. Netflix had expected to gain 300,000 US subscribers, and Wall Street was expecting it to add 352,000 US subscribers.
Internationally, Netflix added 2.8 million subscribers, below its target of 4.7 million and Wall Street’s target of 4.8 million. Netflix stock has been under pressure since the company reported the subscriber growth miss.
Netflix plans to report its third-quarter results on October 16. The company expects to add 800,000 US subscribers and 6.2 million international subscribers in the third quarter.
Investor concern about Netflix losing some of its popular shows to rivals may have also pressured the stock. AT&T is pulling its hit show, Friends, and Comcast is withdrawing The Office. Both are to be available on rival video services.
Netflix now the worst-performing FAANG stock
With Monday’s decline, Netflix stock is now down 0.65% year-to-date, and the FAANG group’s worst performer this year. Year-to-date, Facebook, Apple, Amazon, and Alphabet stocks are up 42.51%, 38.66%, 18.86%, and 18.16%, respectively.