Price hikes, new rivals cloud Netflix outlook

Disney+ Confirms Vision and Scarlet Witch, What If?, And More Marvel Shows

Shares of Netflix jumped 3 percent on Tuesday ahead of the streaming video service's quarterly results, with traders expecting a larger than normal reaction from the stock as new competition looms from Walt Disney Co.

The streaming company expects to add just 5 million subscribers globally next quarter, down 8 percent from the 5.45 million it added during the same period a year earlier, the company said in a letter to shareholders Tuesday.

Netflix's performance may help ease any worries related to a recent price hike that raised the cost of its most popular plan to $13 a month, a $2 increase.

Netflix's results come after it announced a $2 price increase to $13 a month for United States subscribers, its largest audience.

And the reason for doing so is easily found on the streaming giant's investor relations page under the financial reports section.

Festival-goers told to run as fire breaks out at Coachella overnight
ABC7 Los Angeles reported that witnesses saw public showers engulfed in flames after hearing a loud boom similar to an explosion. The Coachella fire occurred near the center of the Empire Polo Club grounds venue, at a mobile shower unit.

Earnings, meanwhile, came in at 76 cents per share, a bump over analyst expectations of 58 cents per share.

Indeed, considering how big The Walt Disney Company's media empire was already, there wouldn't have been much more benefit to buying all that stuff from Fox if they weren't somehow going to make even more money off of it. Disney dropped a ton of information about the service on yesterday's investors call. Having a controlling stake in Hulu could allow Disney to provide another streaming home for the kind of Fox titles that are less family friendly than the content that they want to have on Disney+, so maybe we'll see more adult-oriented titles ending up over there. Despite the impending threat of Disney's new streaming service, Netflix will remain the dominant force in the industry for the foreseeable future.

But the company reduced its earnings guidance for the second quarter from $0.99 per share to $0.55, prompting the initial sell-off. The monthly price of $6.99 is barely half of Netflix's most popular plan, and Netflix's stock slid almost 5 per cent the day after the Disney+ unveiling. The monthly payment for the basic plan is as low as 6,500 won ($5.70) when consumers limit the use of service to mobile devices.

KeyBanc Capital analyst Evan Wingren said he agrees that Netflix is safe - at least for now. Back in January the word in the Switch rumour mill was that the new console would have an upgraded 1080p OLED touchscreen display (the original Switch only has a 720p LCD one), however no other specs were forthcoming, something that hasn't changed.

"We'll see what the right mix of features is, because there is a bit of magic to try and get the right set of features at the right price point in a way the consumer can relate to", said Peters. In a three-hour event Thursday, Disney revealed the release date, price, shows, and movies planned for its Netflix competitor.

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