Netflix (NASDAQ:NFLX) originals are easily one of its biggest selling points. No surprise there; content like “Stranger Things” effectively made the streamer what it is today, even if not every one is a winner. But new reports suggest that Netflix’s originals came from unlikely sources, and investors weren’t exactly happy, sending shares down fractionally in the closing minutes of Monday’s trading.
The new word from Ampere Analysis revealed that Netflix ordered the majority of its titles “…from outside the US.” It wasn’t alone in this clearly international preference, as Amazon (NASDAQ:AMZN) also made a similar play. In fact, reports suggested that the two of them combined represented over half, 53%, of the world’s overall streaming commission rate for 2024’s first quarter alone.
The duo reportedly targeted filmmaking operations in both India and Korea, not much of a surprise for Netflix given the success it saw with “Squid Game.” India, however, produced a bumper crop of “crime and thriller content,” and is on track to be Netflix’s biggest source of subscribers in the region.
FAST Continues Its Rise
Yet there’s one destabilizing element in this market to consider: the rise of FAST, or Free Ad-Supported Television, spending. With Netflix, among others, hiking prices in the midst of disastrous inflation levels and increasing concerns over the broader economy, the value inherent in FAST services are catching a lot more attention.
In fact, despite the comparative lack of original content on these platforms—which are mostly just reruns of older shows—they’re still catching a lot of viewers, with numbers rising over the last few years. In fact, TransUnion executive Julie Clark declared the FAST model a “sleeping giant” in the field thanks to a combination of being “easy” and “accessible.”
Is Netflix Stock a Hold or Sell?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on NFLX stock based on 23 Buys, 12 Holds and one Sells assigned in the past three months, as indicated by the graphic below. After a 52.5% rally in its share price over the past year, the average NFLX price target of $659.60 per share implies 2.07% downside risk.
