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Needham analyst Laura Martin, who downgraded the
California-based tech giant to "underperform", believes Netflix
will have to add a lower priced service to compete with
competitors including Apple Inc's <AAPL.O> Apple TV+ service and
Walt Disney Co's <DIS.N> Disney+.
The cut came a day after Netflix dominated nominations for
January's Golden Globe awards, landing 17 in TV categories and
17 more for movies, including leading contenders "Marriage
Story" and "The Irishman".
Netflix's video streaming push has seen subscriber numbers dwarf
those of rival services at the cost of huge investment in both
regional and international content on its platform.
The streaming service had 60.62 million paid subscribers in the
United States as of its latest quarter ended Sept. 30,
accounting for over a third of its global subscriber base.
The approach comes at the cost of a rising debt pile, which
stood at $12.43 billion as of Sept. 30, sparking concerns among
investors.
Martin argued that the video streaming pioneer's staunch refusal
to allow advertising on its platform force it to stick with
premium price points which will result in subscriber losses in
its most profitable market.
"Netflix's premium price tier of $9 to 16 per month is
unsustainable," Martin said, adding that the loss of popular TV
shows such as "Friends" and 'The Office' to its competitors
could hit the company's value over time.
Netflix shares, which have been under pressure this year, fell
2.6% to $294.50 in trading before the bell on Tuesday.
Martin is now the sixth analyst to rate the stock sell or lower.
A majority of brokerages still rate the stock at 'buy' or
higher.
(Reporting by Aakash Jagadeesh Babu in Bengaluru; Editing by
Anil D'Silva)
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