Why NETFLIX Will Thrive in 2020 (NFLX Stock Analysis)
Netflix Stock (NFLX Stock) is controversial - Is NFLX Stock a Buy in 2019?? NFLX Stock during our Analysis has a PE over 100, and competitors entering this space that are finally going to be a serious threat so Netflix stock may have a long way to go until it bottoms out.
BUT, I don't believe it's all doom and gloom for this company, and I want to present 3 reasons in this video on why I believe NFLX will be just fine as a company and why it could continuing thriving in 2020 and beyond.
NFLX Stock Analyst Price Targets: http://bit.ly/2miJwrv
Watch my video on 3 Stocks for October where I cover NFLX as well: • 3 Stocks to BUY in October 2019
1) Sticky Business Model
The recurring monthly payment business is huge, and IMO, is a very sticky business. Once someone signs up for a month of NFLX, there's a good chance that they continue using the service and continue paying that monthly fee. Look at the Cable and Satellite TV market. A recent survey showed us that 44% of American households STILL subscribe to a Cable TV service. Even with NFLX, which is most likely a fraction of the cost of Cable, people continue paying - and a lot of them have NFLX as well. There's many reasons they would keep cable - one being for live sports, which is big in north America. I personally think that growth will continue chugging along for NFLX - maybe not so much in the US as it's reaching saturation, but more so worldwide and these guys have the advantage of having been first to market and having time to build a platform people enjoy using. I have no doubt they will continue acquiring customers, and those customers will continue subscribing to NFLX well into 2020.
2) There's room for multiple players
I strongly do believe that no 1 company will be the only one left standing in the streaming wars. I think if we look at other services, this is very evident. A good recent example is Music streaming - Spotify vs Apple Music - these are 2 of the biggest options for consumers, and many people felt that once Apple Music came out, Spotify was going to be a bankrupt company and no one would continue paying for Spotify if Apple offers the same service - because people trust that brand more, and especially iPhone users, would prefer it. Well, Apple Music is doing well, but so is Spotify - because they are sticky and once someone signs up - it's hard to get them to leave! I believe the exact same thing will happen with Video streaming and NFLX could end up being like the Spotify, where Apple TV+ and or Disney+ overtakes them in terms of subscribers, BUT, it doesn't make NFLX an irrelevant company.
3) Original Content and Streaming Rights
This is going to be a major selling point for each of the platforms moving forward - their content - because at the end of the day people pay for these services to consume content! I believe NFLX has an incredible lineup of content personally - from original series, to exclusive rights on shows, they have done a good job of building up a strong library. I think at least for the first few years as Disney+ and AppleTV+ builds up their content library, NFLX will remain #1. I don't think people will cancel their NFLX subscription with shows like 13 reasons why, stranger things, house of cards, Patriot Act - which have good followings. NFLX is investing heavily in original content and content licensing, spending 12B in 2018, and expected to spend 15B in 2019, and probably more in 2020 as competition heats up. 2020 will not be the year IMO where NFLX struggles, if ever, I think it will take 3-5 years for these competitors to catch up in terms on original content.
#Netflix #NFLX #PositiveInvesting
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