Ignore the Hype. Here's Why Netflix Doesn't Need Ads
Netflix (NASDAQ: NFLX) stock price fell on Tuesday morning after it was downgraded to underperform (sell) by Needham analyst Laura Martin, who argued that the streaming leader risks losing millions of subscribers over the next year. Martin says that the proliferation of low-cost rivals will cause a tidal wave of customer losses in 2020, projecting that 4 million subscribers will cancel in the coming 12 months.
She proposes a solution for the predicted avalanche of departures, saying Netflix "must add a second, lower-priced, service to compete with Disney+, Apple+, Hulu, [Viacom's] CBS All Access and [Comcast's] Peacock," Martin wrote in a note to clients on Tuesday. The company's heavy spending on original content has overloaded Netflix with debt, and its balance sheet "cannot withstand lower revenue," she said.
This is a commonly held view, but it missing an important point about the streaming giant's trajectory. Here's why Netflix doesn't need ads.
Source Fool.com
