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2 Reasons Why Netflix, Inc. (NASDAQ:NFLX) Doesn’t Need to Worry About Apple: Analyst

DataTrek Research

Netflix, Inc. investors have been concerned of late after the firm lost many big-name movie titles, and reports of Apple’s entry into TV programming. On Thursday, Cantor Fitzgerald analyst Youssef Squali said the firm must not be worried about Apple foraying into the streaming, and gave two reasons for it.

apple  (AAPL) VS Netflix (NFLX)

No worries for Netflix investors

Speaking on CNBC’s “Squawk on the Street,” Squali said “At the end of the day, Netflix has a sustainable competitive advantage that can be defined in two things: the brand and the price.”

A standard Netflix subscription is priced at $8 a month. “I think there is a lot of noise around Netflix, a brand that by now has become synonymous with streaming,” Squali said.

Netflix CEO Reed Hastings agrees with Squali. Hastings is not at all bothered with the rumored entry of Apple in the streaming segment. A few days back, Hastings told CNN that it’s no big deal as other firms are also doing shows. “HBO is doing shows, FX is doing shows … so the fact that additional tech companies may be doing shows, that’s really not that big a deal given the total number of shows being produced around the world,” the CEO told.

Even though both the Netflix CEO and analysts are not worried over Apple’s foray in the segment, investors are somewhat nervous. The stock continued to decline for the fifth straight day, closing down 4.2% on Thursday. Since Aug. 27.  The stock has lost 14%.

Rivals attacking Netflix

In recent weeks, Netflix, Inc. has been impacted by broad economic fears. The stock, which is known to be volatile, took a beating last month along with other media and entertainment stocks. But, Netflix has taken a bigger blow than the overall market amid fears of competitive pressure from Apple, Hulu and Amazon.

For Netflix, Inc. , the bad news started from Sunday, when the firm disclosed that it will not be renewing its deal with Epix that is set to expire at the end of this month. Later, Hulu and Epix entered into a similar deal.

In another blow, Hulu came up with an ad-free subscription service costing $12 a month. On Tuesday, Amazon launched a feature allowing users to view their favorite TV shows and movies on iOS and Android devices offline. In addition, a few days back, Amazon also announced a September debut for Prime Instant Video in Japan.

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Aman is MBA (Finance) with an experience on both marketing and Finance side. He has work as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, playing PC games and cricket.