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Wall Street hopes to support Netflix against Disney Plus



SAN FRANCISCO (Reuters). Wall Street’s reaction to Walt Disney’s long-awaited streaming service (DIS.N) suggests that investors believe the competition may not be as crushing as expected for entertainment rival Netflix Inc (NFLX.O) .net

Netflix CEO Reed Hastings warned in September that competition over Apple (AAPL.O), Disney, and NBC’s entry into the global streaming market would spike content costs, adding to concerns about the already slowing growth in Netflix subscribers.

Earlier this month, Apple launched a streaming video service with a small offer of original shows for $ 5 a month, compared to Netflix's standard price of $ 13 a month. HBO Max AT & T is scheduled to launch in early 2020.

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A $ 7 Disney service per month includes family-run new and classic TV shows and movies from some of the world's most popular entertainment franchises. But Disney + shuns content intended for a more mature audience, often popular on Netflix, which gives consumers a reason to pay for both, Leap said.

After a recent surge, Disney shares are trading 23 times with expected earnings, the highest forward rate since 2004, according to Refinitiv. As investors revise the value of Netflix, its forward margin multiplier has been trading below 60 since September, well below the average of 148 over the past five years.

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Netflix CEO Reed Hastings warned in September that competition over Apple (AAPL.O), Disney, and NBC’s entry into the global streaming market would spike content costs, adding to concerns about the already slowing growth in Netflix subscribers.

Earlier this month, Apple launched a streaming video service with a small offer of original shows for $ 5 a month, compared to Netflix's standard price of $ 13 a month. HBO Max AT & T is scheduled to launch in early 2020.

A $ 7 Disney service per month includes family-run new and classic TV shows and movies from some of the world's most popular entertainment franchises. But Disney + shuns content intended for a more mature audience, often popular on Netflix, which gives consumers a reason to pay for both, Leap said.

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After a recent surge, Disney shares are trading 23 times with expected earnings, the highest forward rate since 2004, according to Refinitiv. As investors revise the value of Netflix, its forward margin multiplier has been trading below 60 since September, well below the average of 148 over the past five years.

Chuck Carlson, Executive Director of Horizon Investment Services in Hammond, Indiana, advises customers to avoid Netflix because of its assessment, rising production costs and concerns about weak subscriber growth.

“Since Netflix is ​​the leader, it can lose the most, and now we will begin to see fairly stable data points coming from all other streaming services,” Carlson said. "It still seems like a complicated story for Netflix."


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