Netflix stock got downgraded to “neutral” from “buy” by Buckingham Research Group. Shares of the online video streaming giant dropped -0.85% Friday on the news. Buckingham analyst Matthew Harrigan cited heated competition in the video streaming space as a crucial factor behind the rating downgrade.
Traditional, long-standing media/entertainment giants are looking to expand their digital presence, which could potentially intensify competition to current streaming leader Netflix. Walt Disney will roll out its streaming platform (called Disney+), while AT&T (via WarnerMedia) is set to launch its own by the second half of the year. Comcast is planning to enter the streaming market in 2020 through NBC Universal.
What’s more, Amazon Prime has apparently been upping the ante against rival Netflix. Amazon spent an estimated $5 billion on its online streaming platform in 2018, compared to $4 billion it spent in 2017. Planning to release 30 original movies every year and having splurged a record $47 million for the rights to stream Sundance Film Festival’s five independent films, Amazon looks to be beefing up its content big time. In 2018, Netflix spent an estimated $8 billion on content.
Apple Inc., too, is foraying into video streaming, having reportedly invested more than $1 billion into producing original content this year, according to the Wall Street Journal.
Buckingham Research analysts’ also indicated concerns over recent step-downs of Netflix executives. On Thursday, it was revealed that Chief Marketing Officer Kelly Bennett is resigning. Bennett’s leadership saw a five-fold growth in Netflix's membership base. Earlier, Netflix’s finance chief David Wells left the position in August.