Netflix Inc. (NASDAQ:NFLX) has had a mixed first half of 2019 after losing significantly in the last two months. Since the beginning of the year, the company reported record market highs, but this crumbled in the last two months.
Netflix lost subscribers
In July the company announced that it had unexpectedly lost subscribers. It also indicated that it was battling growing competition form players such as Walt Disney Co (NYSE: DIS) and Apple Inc. (NASDAQ: AAPL). As a result, the company has shed all its 46% gain year-to-date, and on Monday it officially plunged into negative territory.
The predicament of Netflix resulted from a series of various bad news events since June. Its popular show “The Office” was departed the platform with NBC. Then the subscriber loss in the US and a massive miss on international subscribers followed in Q2, which led to the decline of the stock. This is the largest dip that the company has endured in the last five years.
Things became worse for the streaming service company following the announcement of new streaming services by rivals. Apple launched Apple TV+, Disney introduced Disney+, NBC with Peacock and WarnerMedia’s HBO max, which pose serious competition to the company.
Wall Street analysts began becoming skeptical regarding Netflix stock. On Monday Barclays analyst Kannan Venkateshwar said that the stock is expensive under the new valuation context for growth firms as the company needs more subscribers than is available.
Netflix losing the war on pricing
Most of the company’s gains this year were from the massive pop back in January when Netflix changed its pricing power. It managed to increase prices by up to 18%, which lead to the stock soaring. However, now, with more players in the industry, and investors will not prefer hiking prices. Competitors are already winning the battle in terms of pricing with Apple TV+ costing $4.99 per month and Disney+ having a standard plan of $6.99. This is below what Netflix charges for its basic plan per month.
Something that might be hurting the company’s reputation is their early and unexpected cancellation of series.