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Netflix In The Age Of The Streaming Wars
On the latest episode of Today In Five:
Netflix is feeling the effects of fierce competition in the streaming space. As players like Disney+ and Apple TV+ enter the space, Netflix is seeing slower growth in subscriber numbers.
Tesla became the first $100 billion publicly listed U.S. carmaker after a jump in its share price during after-hours trading, according to Reuters. If its valuation — more than Ford and General Motors combined — lasts for one-month and six-month averages, Musk will be granted a huge payout. The company's stock has more than doubled in three months, thanks in part to a surprise quarterly profit, higher production at its China factory, and better than expected annual car deliveries.
Express said on Wednesday it would shutter about 100 of its stores by 2022, including nine already closed last year, 31 by the end of this month, and 35 by the end of January 2021. The company as of November 2019 operated more than 600 stores. The company will also aim for savings through negotiations as store leases come up for renewal, according to the CFO. In a press release, CEO Tim Baxter also presented a turnaround strategy that goes beyond closures and cost-cutting initiatives, including a new loyalty program and store credit card that will debut this fall. The company said it will also expand its in-store pickup service for online orders, a strategy that has proved increasingly effective for retailers.
Kim Kardashian West’s shapewear brand, Skims, will launch in select Nordstrom locations on February 5th, according to a social media post from the department store. Per the company’s website, Skims will be available at 25 Nordstrom stores as well as on nordstrom.com. The move pushes the department store further into a direct-to-consumer strategy. The retailer has also recently partnered with DTC brands Glossier, luggage brand Away, and sustainable fashion company Everlane.
Netflix Feeling The Effects Of Competition In The Streaming Space
Netflix downplayed concerns over competition in its Q4 2019 earnings report. Netflix wrote that, “despite the debut of Disney+ and the launch of Apple TV+, our viewing per membership grew both globally and in the U.S. on a year over year basis, consistent with recent quarters." Netflix added 8.8 million net subscribers in the fourth quarter, on par with the 8.8 million added last year and ahead of the company’s internal forecast of 7.6 million. But Netflix also acknowledged that growth in the U.S. and Canada is slowing down. The streaming service added just 550,000 thousand net subscribers in the region this quarter, and just 420,000 thousand in the U.S., down from 1.75 million the same quarter one year ago.
Netflix cited, “U.S. competitive launches,” as one of the primary factors for slowing growth. Netflix is also factoring in competition to its guidance, noting that elevated churn levels in the U.S. led the company to project net adds of 7 million globally for the first quarter of 2020, down from 9.6 million in the first quarter of 2019. Since NBCUniversal’s Peacock and AT&T’s HBO Max haven’t launched yet, it’s possible Netflix may be preparing for a more consistent decline of U.S. subscribers. The effect of increasing competition will be interesting to follow where Netflix is concerned. If the service can continue to beat back rivals, it should be able to sustain its lofty valuation over legacy media companies.