Netflix is still the undisputed king of streaming. It had 167 million users all over the world before the coronavirus pandemic pushed the whole world into the confinement of their houses.
After the bell Tuesday, the company will report its earnings. Investors are dying to know how the pandemic has changed Netflix’s workings, viewership, and the number of subscribers.
Netflix’s (NFLX) user projection amounts to about 174 million worldwide — a rise of about 7 million from last year. Bernie McTernan, a senior analyst for Rosenblatt Securities, claims that the company will blow the number out of the water thanks to a substantial growth from people confined in their homes.
McTernan told CNN Business it is no wonder that streaming is on the rise, because Netflix has an unparalleled opportunity to do so. “Everyone believes it will be a massive beat. The question is how massive will it be”, he stated.
As demand for streaming increases, investors in Wall Street are being optimistic that Netflix will soon raise prices, McTernan added. But that could be tough news for many clients, since so many people are without jobs now.
McTernan noted that some bullish investors will claim that this higher percentage of usage points to Netflix’s bigger pricing power. While bearish investors will probably state that this economy sludge and more rivals can steer them into less pricing power. Moreover, he stated that it would be huge if there are any insights on future pricing.
Netflix stocks are on the rise: this year it’s 30 percent. It finished at a record high on Thursday, raising its market value to almost $193bn. Which cast a shadow on Disney’s $184 billion market value. When the stock of Disney reached an all-time high in November 2019 the market value was double that of Netflix.
Disney (DIS) was devastated by the epidemic, as the fun-themed parks were shut down and many movies postponed, but the streaming service Disney+ was booming. Earlier this month it crossed the 50 million subscriber mark, which placed it close to its goals for the long run.
Just the same as its rivals, production delays due to coronavirus could affect Netflix’s content distribution run, McTernan stated. Netflix can weather the storm when its gigantic catalog keeps pumping out massive wins such as”Tiger King: Murder, Mayhem and Madness,” but that is not something to rely on.
“Tiger King” tells the story of Joseph Allen Maldonado-Passage’s life, alias Joe Exotic and has been the last couple of weeks’ breakout hit. It gave way to a lot of online conversation, memes and thinkpieces. And of course, an enormous viewership count.
According to Nielsen, about 34 million unique viewers were glued to the the show within the initial 10 days of its launch. However, that amount does not include audiences beyond the USA, therefore Netflix will probably reveal more nuanced numbers regarding the show.
Netflix will also have a whole lot to say about its own competition, which happens to be gaining traction.
Peacock, owned by the Comcast (CCZ) streaming agency from NBCUniversal, was established on April 15 for Comcast’s X1 and Flex clients. CNN’s parent firm WarnerMedia is ready to launch its novice service, HBO Max, as early as next month.
Earnings of Airlines
It has been the worst period for airlines. A nearly complete blockage of air traffic has diminished sales, and also this week investors will begin to see exactly how bad the situation is.
Southwest Airlines (LUV) will show results on Thursday, while DAL (Delta Airlines) will be the first one to report its results for the 1st quarter on Wednesday. They can both report first losses in years.
The reductions will be thinner than in the present quarter, since journeys were not hurt that much in the first month – it was much more worse in the second and third month. Moreover, US travel and flights were still holding up in February.
However, March traffic was almost completely stopped. The next quarter guidance may be even worse.
At the beginning of April, Delta CEO Ed Bastian told airline workers that the company anticipates earnings to be down 90 percent in the next quarter and the industry has yet to find how deep this catastrophe will go.