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Netflix Stalls: Will It Survive Against Disney, HBO, and Apple?

(Image credit: Netflix)

Netflix must be at least a bit nervous. The company has lost 130,000 US customers last quarter following its recent price hike, the first time this has happened since the streaming company split from its DVD business. Even worse: it has also missed global growth expectations.

Industry analysts are saying that the company has tanked, perhaps prematurely given its momentum. Netflix’s stock dropped more than 10% after the company announced its Q2 earnings yesterday, losing an incredible $20 billion in valuation.

If you are still a Netflix user, you probably don’t care about any of this. The company keeps investing in its own original shows and movies, many of which are well-received. There’s plenty of good stuff to binge on in the platform (including a new season of Glow coming soon)

But Netflix still has plenty of reasons to be worried, even while it is denying any concern for news like losing Friends, the Office, or all the Marvel and Star Wars movies.

The fact is that all those highly coveted properties are moving to the competition. To put this in perspective, a whopping 22% of Americans have declared that they would cancel Netflix when Marvel and Star Wars movies are removed. Disney has already stopped licensing its movies to the Californian company starting with Captain Marvel.

Disney is not only pulling the Netflix plug on its many franchises, but also investing billions in its own streaming platform. Like Warner Media, which is taking Friends into its new HBO Max platform and will be boosting original productions thanks to funding from parent company AT&T. 

And of course there’s Apple and TV+, which will instantly enjoy direct access to Apple hardware owners and deliver many high profile original properties. And let’s not forget about Amazon, which is still pushing out lots of original content via Prime Video — and it’s working out very well for them.

But it may be too soon to declare the demise of Netflix because of a bad quarter. There is reason to be worried, but the company is strong now and has a lot of must-watch original franchises in its arsenal. It’s also spending an stunning $19 billion on original programming in 2020, after spending $12.04 billion in 2018 and $8.9 billion in 2017. The company is expected to spend $15 billion in 2019.

So to answer the headline question: Yes, Netflix will survive. As long as they don’t roll out ads — a move that was vehemently denied in the financials call — and keep producing good stuff, the streaming giant should be OK.