While the notion of a streaming provider like Netflix (NFLX) being accused of “dumbing down” television may sound absurd—some would argue that television has been doing that all by itself for decades—that is just the allegation Netflix is facing today. But investors could not care much less, and they sent shares up over 2% in the closing minutes of Friday’s trading session.
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A report from The Guardian brought out word from “streaming insiders” who have apparently been required to modify their scripts in a bid to make them “second screen” friendly. Netflix is, for many, background noise, and Netflix is apparently modifying its content to be conducive to that market segment.
Netflix has apparently told screenwriters to, specifically, “…announce what they’re doing so that viewers who have this program on in the background can follow along.” The report did question if it was “inherently bad to cater to people who may prefer their viewing on the more casual side.” However, several other screenwriters noted that they had never actually received any kind of “pressure” to alter their material for such purposes to begin with. Thus, we are left with something of an unanswered question, but a point that might make some flee Netflix for what they see as greener pastures.
Everybody Loves Sports
And with Netflix poised to report results soon, a Reuters report spelled out the likely benefits that Netflix will enjoy from sports streaming. In fact, the report looks for Netflix to tack on more than nine million subscribers in the United States alone as the result of things like the Paul / Tyson boxing match and the Christmas Day football games.
Sports make an excellent addition to Netflix’s lineup, noted Ross Benes with eMarketer. Not only does it offer “…some stability for the advertising side,” but it also serves as a means to “…make the account stickier” for people who might only show up to catch up on a season of a show they enjoyed. The exact impact of sports content on content nomads is unclear, but there can be little doubt that sports are a value-add for Netflix.
Is Netflix Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on NFLX stock based on 23 Buys, eight Holds and two Sells assigned in the past three months, as indicated by the graphic below. After a 77.46% rally in its share price over the past year, the average NFLX price target of $942.22 per share implies 9.93% downside risk.
