Anyone who has bought and held Netflix (NASDAQ:NFLX) stock for more than a couple of years has made a killing as the company has spearheaded the cord-cutting, anti-cable-TV revolution. Netflix was the undisputed leader in the streaming niche for a long time — and still is, perhaps, but some well-known names are poised to take some of its market share.
In particular, Disney (NYSE:DIS) and Apple (NASDAQ:AAPL) are in the process of launching direct hits against Netflix’s dominant position. Whether it’s advisable to own shares of NFLX stock right now is debatable — and perhaps even a bit dangerous as the competition has brand-name recognition, compelling content offerings, and low subscription prices that some consumers won’t be able to resist.
Who’s the King of Streaming Content?
Gone are the days when Netflix had the only streaming programming worth watching, as the competitors have content that’s highly appealing to multiple viewer demographics. Apple TV+, which is slated to launch on November 1, will feature famous names like Oprah Winfrey, Steven Spielberg, Kristen Wiig, Reese Witherspoon, Jennifer Aniston, Steve Carrell, J.J. Abrams, and even some Sesame Street characters in its programming.
Like Netflix, Apple TV+ will provide its content without ads; however, unlike Netflix, Apple won’t release its series episodes all at once. In other words, viewers won’t be able to binge-watch an entire series of their favorite shows on Apple TV+. This could prove to be a smart move on Apple’s part because making viewers wait for new episodes builds the tension and anticipation, with episodes becoming “events” instead of just part of an all-night binge.
As for Disney, they’ll be rolling out Disney+ on November 12 and this service could possibly outdo Netflix and Apple TV+ combined, at least in terms of content quantity. Disney+ subscribers can expect more than 7,000 television series episodes as well as between 400 and 500 movies, which will include not only all of the Disney and Pixar features that kids and adults have grown to love, but also the gamut of Star Wars and Marvel fare that keep viewers coming back again and again.
To be honest, if I were holding NFLX stock, I would be quite concerned that Disney will steamroll over Netflix in the coming months and into 2020. Sure, adults enjoy The Walking Dead and Orange Is the New Black and some people liked Dave Chappelle’s controversial stand-up comedy special, but I can imagine entire families watching Pixar, Marvel, and Star Wars films over and over again, both together and separately on their own devices. It won’t be long, I suspect, before Disney takes Netflix’s place as the content king simply due to its overwhelming quantity of beloved, instantly recognizable film offerings.
Pricing Should Concern NFLX Stock Investors
Consider the demographic segments that might typically consume streaming content: college students and families on a budget who can’t always afford movie tickets or expensive cable bills. I would even go so far as to state that price was a major factor in people’s decision to cut the cable cord and switch to Netflix in the first place.
Now, the same price considerations could entice consumers away from Netflix. While it’s true that Netflix has a basic plan that costs $8.99 per month, hardly anybody chooses that plan and most people opt for the full-featured $12.99 plan. In contrast, Apple TV+ is set to be priced at a mere $4.99 per month; not only that, but the purchase of a new Apple device will reportedly come with a free subscription to Apple TV+ for one year.
So, on the pricing front, Apple TV+ wins hands down. Disney+ also beats Netflix in this category with a monthly subscription price of just $6.99. Alternatively, a complete package including not only Disney+ but also ESPN+ and Hulu can be obtained at a monthly rate of $12.99; that’s a heck of a lot of content for the same price as a Netflix subscription, and a cause for concern for folks holding NFLX stock.
Bottom Line on Netflix Stock
I’m not concerned about the Netflix stock price or the company’s fundamentals, so much as the stiff competition that will enter into the streaming fray next month. The ideal entry point to buy NFLX stock, as far as I’m concerned, has already passed and now’s as good a time as any to exercise caution and take profits on Netflix shares.
As of this writing, David Moadel did not hold a position in any of the aforementioned securities.