Analysts Say Gaming and Shopping Won't Save Netflix
Sam primarily covers entertainment and media for dot.LA. Previously he was Marjorie Deane Fellow at The Economist, where he wrote for the business and finance sections of the print edition. He has also worked at the XPRIZE Foundation, U.S. Government Accountability Office, KCRW, and MLB Advanced Media (now Disney Streaming Services). He holds an MBA from UCLA Anderson, an MPP from UCLA Luskin and a BA in History from University of Michigan. Email him at samblake@dot.LA and find him on Twitter @hisamblake
Despite intensifying competition in the streaming wars, Bank of America analysts said on Tuesday they see Netflix remaining content king and predict shares of the Los Gatos company will jump to $680 per share by this time next year.
Netflix was trading around $541 midday Tuesday.
The streaming wars are in the midst of a heated round of consolidation. Amazon shelled out for MGM in late May, following a mega merger between WarnerMedia, which runs HBO Max, and Discovery. Both deals remain subject to regulatory approval.
To keep up, BofA analysts said in a research report they suspect Netflix is eying franchises and other intellectual property it can spin into new films and shows to bolster its selection. That would be the opposite approach that its competitor Amazon took when it spent $8.45 billion to gobble up MGM Studios for the iconic Hollywood studio's library content.
Netflix has been moving deeper into ecommerce, aiming to gain an edge over other streamers, but analysts are unimpressed.
This spring, Netflix opened a new online store, which sells gear like apparel and action figures tied to some of its content. And the streaming giant is reportedly looking to hire gaming executives, as reported by The Information. But the analysts said neither move is likely to give them a leg up.
Movies and Series
Netflix will be welcoming several new films each year from its recently announced multiyear partnership with Steven Spielberg's production studio, Amblin Partners. The analysts cheered the deal, calling it "instrumental" in bolstering Netflix's movie pipeline. They also called out the second seasons of "Lupin" (debuted in June), "Bridgerton" and "The Witcher" (both debuting later this year) as Netflix's most important original content right now.
Down the road, the analysts are watching what may come of the UK government's plans to regulate U.S. streaming services. It is unclear what changes will result, but the analysts highlighted the U.K. Culture Secretary's fears that some viewers may consider hit series "The Crown" as nonfiction. The government's plans are set to be announced later this week.
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Sam primarily covers entertainment and media for dot.LA. Previously he was Marjorie Deane Fellow at The Economist, where he wrote for the business and finance sections of the print edition. He has also worked at the XPRIZE Foundation, U.S. Government Accountability Office, KCRW, and MLB Advanced Media (now Disney Streaming Services). He holds an MBA from UCLA Anderson, an MPP from UCLA Luskin and a BA in History from University of Michigan. Email him at samblake@dot.LA and find him on Twitter @hisamblake
Image Source: Archer