The sell off of shares in Netflix continued on Friday over subscriber growth concerns.
Yesterday, the shares of the streaming titan decreased by 8.5% following Robert Fishman’s cautionary statement as a MoffettNathanson research analyst in an investor note. He suggested that the profit from converting password-sharing users into paying customers might have reached its peak.
Friday saw Netflix shares close at $891.11, dropping by 1.7%, or $15.25. This was a slight recovery from its lowest point during trading, which stood at $858.63, but it still fell significantly short of the record high of $1,064.50 reached on February 14 for shares in the streaming company.
The drop in stock prices occurred after Netflix’s Chief Financial Officer, Spence Neumann, stated at the Morgan Stanley conference on March 5 about Netflix’s approach towards live sports rights. Neumann informed the investors that Netflix would primarily focus on major sports events such as boxing specials, golf tournaments like the Netflix Cup, some NFL games on Christmas Day, and WWE wrestling matches, but wouldn’t be planning to bid for regular or full seasons of sports rights in the near future.
In instances like Paul Tyson’s fight, NFL on Christmas Day, and WWE events, we find ourselves in significant highlights. These moments boost not only the entertainment value to our members but also aid in user acquisition. They spark more discussions, and we anticipate they will enhance retention for our service in the long run. That’s what we’re focusing on,” Neumann explained at the Morgan Stanley conference.
If Disney, Fox, and Warner Bros. Discovery decide to independently develop their own sports streaming platforms instead of collaborating on Venu, it might have consequences if Netflix increases its efforts to acquire live TV sport rights. The optimistic view for Netflix investors is that an expansion into live sports programming could eventually warrant higher subscription fees, leading to increased revenues in the future.
However, Neumann stated that such a development might not occur. Instead, Netflix is planning to host more significant sports events, yet they won’t invest in broader sports packages unless the financial return was promising.
We continue to explore possibilities, it’s not ruled out entirely. If we can find a financially viable and sensible approach for a comprehensive sports package, we are open to the idea. However, this is not an immediate focus or something we foresee in the short term.” – Neumann to investors.
Netflix is planning to utilize its knowledge in sports documentaries by incorporating event sports into their live sports programming. This will become a reality after Netflix obtained exclusive U.S. streaming rights for the 2027 and 2031 editions of the FIFA Women’s World Cup. Furthermore, they intend to create additional programming and studio shows to enhance the live matches.
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2025-03-08 00:56