Why Amazon's MGM Deal Is Bad for Netflix

Motley Fool2021-05-27

Amazon's (NASDAQ:AMZN) blockbuster acquisition of MGM Studios for $8.4 billion could cause headaches for rival Netflix (NASDAQ:NFLX) as it creates a much more formidable competitor in the streaming arena.

After Netflix added fewer than 4 million new subscribers in the first quarter and said it expects to add only around 1 million in the second, analysts believe Amazon's movie deal makes it imperative that Netflix show it can resume growth in the back half of the year.

For years Netflix has been the straw that stirred streaming video's drink, and as more competitors entered the market during the pandemic's year of lockdowns, it largely remained the premiere streamer.

Yet there are limits to just how many services consumers will subscribe to. Though Netflix is often still considered to be one of the default options, Benchmark analyst Matthew Harrigan just told investors in a research note the "global video streaming playing field is looking ever less unipolar" around Netflix, and rival services will be seen as much more competitive.

He's not alone. Truist analyst Matthew Thornton says Amazon's Prime Video is now "more formidable," though he only sees it as "modestly negative" for Netflix and Walt Disney, and Piper Sandler analyst Thomas Champion said he believes it "may be a bigger issue" for the two.

The deal gives Amazon much greater access to quality content and could lead Netflix to lose more content. Since more studios are diverting more content to their own direct-to-consumer services, Netflix will need to rely upon greater amounts of original movies and shows.

That may not be as much of a draw for luring in new subscribers, and could be more worrisome if the deal signals there is more consolidation on the horizon.

免责声明:本文观点仅代表作者个人观点,不构成本平台的投资建议,本平台不对文章信息准确性、完整性和及时性做出任何保证,亦不对因使用或信赖文章信息引发的任何损失承担责任。

精彩评论

  • w8w8
    2021-07-23
    w8w8
    steamed
  • CEM
    2021-05-27
    CEM
    Now 2021
  • tehtarikrox
    2021-05-27
    tehtarikrox
    Not sure if mgm is a good acquisition 
  • Man15
    2021-05-27
    Man15
    Good 
  • Nzt48
    2021-05-27
    Nzt48
    Hmmm
  • JustTradeIt
    2021-05-27
    JustTradeIt
    Nice read
发表看法
13