Hit sitcom Friends has left Netflix’s (NLFX) platform. But that’s not the whole story—we’ll get into that shortly. First, here’s a recap of how Netflix stock performed in 2019.
Netflix stock gained 21% last year, placing it at the bottom of the FAANG stocks chart. CNBC’s Jim Cramer came up with the “FAANG” acronym to refer to a group of high-flying American tech stocks. Netflix’s FAANG peers, Apple, Facebook (FB), Alphabet (GOOGL), and Amazon (AMZN), gained 86%, 57%, 28%, and 23%, respectively, in 2019.
Netflix stock had a strong start last year, gaining nearly 30% in January. But the stock came under pressure in the back half of the year after Netflix reported disappointing subscriber growth in the second and third quarters.
AT&T yanks Friends from Netflix to preserve it for its own HBO Max
AT&T’s (T) WarnerMedia unit plans to launch a new video streaming service, HBO Max, this spring. HBO Max is set to cost $14.99 per month, more than the $12.99 Netflix charges for its most popular plan. Moreover, HBO will cost more than twice as much as Walt Disney’s (DIS) Disney+, which goes for $6.99 per month.
WarnerMedia wants HBO Max to launch with strong programming, perhaps to justify its higher price. To do that, WarnerMedia pulled Friends from rival Netflix. Therefore, the popular 90s sitcom, which had streamed on Netflix for five years until midnight on December 31, will now stream exclusively on HBO.
Netflix announced the loss of Friends to AT&T’s HBO Max in July 2019. Its stock fell more than 12% that month.
Netflix keeps hit sitcom for its international subscribers
But Friends is not totally gone from Netflix. AT&T has only pulled Friends from Netflix platform in the US, according to The Hollywood Reporter. Therefore, Netflix has retained Friends for its international markets—at least for now.
Netflix’s growth has slowed in the US. The company lost nearly 130,000 US subscribers in the second quarter of 2019, the first such loss in years. And Netflix’s struggles in the US didn’t stop there, as it went on to miss its US subscriber growth target in the third quarter.
As the domestic market becomes more difficult, Netflix is counting on international markets to fuel its growth. Therefore, retaining Friends for its international customers should strengthen Netflix overseas.