Analyst Predicts Netflix Might Lose 4 Million Subscribers Next Year

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Netflix could lose 4 million subscribers in 2020 according to Needham analyst Laura Martin, who also predicts the company’s stock to dip 2%. Needham’s reasoning behind the prediction centers around two things: high prices and competitors.

A few years ago, Netflix was one of the few streaming services available. As such, they could set their price at wherever they wanted. Classic monopoly. Remember when it was $7.99 a month? Those were simpler times. Now they provide three different plans ranging from $9-$16 a month. I know what you’re thinking: What about the $9 plan? That’s not that much more. Yes, but that’s the basic plan which doesn’t provide high definition viewing. Wait…people are still watching television in standard def?

The point is, most Netflix customers are paying $13-$16 a month and Martin believes these price points need to go down in order for the company to hold onto a lot of its subscribers. In the past, many of those people would stay on board even as they slowly began raising prices. But Netflix is no longer the only show in town.

With the launch of HBO Max and Peacock in 2020, that will bring the number of streaming options to 10. And HBO Max will be the only streaming service with a higher monthly price than Netflix. Based on the content HBO provides plus the fact that they’re taking the entire Friends library from Netflix, that high of a price seems reasonable, too.

The other competitors offer cheaper prices in addition to exclusive content. For half the price of Netflix, Disney Plus offers The Mandalorian, Marvel, Pixar and a treasure chest of Disney animated classics previously locked behind an imaginary vault. At $3 less, Amazon Prime has a lot of the same movies available as well as original shows like Jack Ryan and Fleabag. Netflix will also slowly lose license agreements with certain titles, which will always rile up consumers.

In the end, Netflix can no longer act like the arrogant older brother. The younger siblings are getting older, stronger and smarter.

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