Panel SA: Netflix subscriber drop leaves doubt between macro scenario and competition, says XP

The loss of subscribers announced by Netflix this month should not signal a warning for the streaming market in general, but the question remains as to how much of this drop is linked to macro issues, which could impact other companies, and how much is inherent to competition. and the loss of market share, according to the assessment of Fernando Ferreira, chief strategist at XP.

Part of the impact has to do with the drop in disposable income, which may have led consumers to cut back on subscriptions because the cost of living went up and choices had to be made. Another slice of the drop is attributed to competition, with loss of market share for streaming services from Amazon and Disney.

“Netflix’s big challenge is that they compete with giant companies that have other lines of business and don’t have a vision of generating profit in this streaming business. For Amazon, the business is different. They have streaming, not to do money on it, but much more to create loyalty from consumers who subscribe to Prime. At Disney, they grew very fast. It’s a tough competition”, says Ferreira.

In the scenario of rising interest rates, with the Federal Reserve giving indications of acceleration, the market is also more skittish with growth companies, such as technology stocks.

“Any problem that the company has, in this scenario of high interest rates, ends up being more exacerbated. The market has much stronger reactions. This has a lot to do with the macro scenario we are experiencing”, says the XP strategist.

Joana Cunha with Andressa Motter and Paulo Ricardo Martins