If you need more evidence that proves just how gun-shy investors may be, you need look no further than today’s story involving Netflix. As you likely know, the streaming wars are about to heat up, with services like Disney+, Apple TV+, and Peacock launching over the course of the next several months. This means that Netflix, a service that’s spent a while without any real competition, will finally have some.
“It’ll be tough competition,” Netflix CEO Reed Hastings said. “Direct-to-consumer [customers] will have a lot of choice.” And he’s not wrong. Here at LRM Online, we often cover that very topic. But apparently, that comment was enough to sway investors’ confidence, as it led to a precipitous 7% drop.
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This drop on Friday is a nine-month low for the service. Though, perhaps that wasn’t the most troubling comment. It may also be his comment that “Someday The Crown will look like a bargain,” meaning that the $100 million show will seem cheap, implying an increase in production costs.
Does this mean that shows will simply after to get bigger in order to attract subscribers, or will this increase in competition simply increase production costs? And how will this increase in competition affect Netflix? Only time will tell.
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