There were those who believed, back when streaming giant Netflix (NASDAQ:NFLX) started its password-sharing crackdown, that viewers would flee en masse to other streaming services, particularly those like Pluto or Stirr that were ad-supported only. However, Netflix is up better than 4% in Tuesday afternoon’s trading session on the news that the opposite has happened, and signups remain high.
While Netflix signups did experience a reversal from the record in June—which isn’t difficult; you can’t have a record high every month forever—the numbers from Antenna, a research firm, suggest that they did at least manage to stay fairly high. The biggest differentiator seemed to be Netflix’s new ad-supported tier, which offered a sufficient bargain after Netflix removed its “basic” tier from service altogether, encouraging people to buy in on the ad-supported tier for the best overall value.
Meanwhile, a new and altogether unexpected development emerged. Once, Netflix was known for its DVD rentals, which it would mail to customers’ homes in special mailers that had postage-paid envelopes built right in. There were many out there—myself included—who wondered what would happen to those vast repositories of DVDs that Netflix formerly owned. The answer has emerged; Netflix is simply giving them to subscribers. Those subscribed to DVD.com, Netflix’s DVD mailing arm, are simply permitted to keep the discs sent to them. Further, those subscribers can sign up for a 10-pack of DVDs at no extra charge to keep permanently after DVD.com closes for good.
These moves, among a host of others, are keeping analysts very much on Netflix’s side. With 19 Buy ratings, 13 Holds, and two Sells, Netflix is considered a Moderate Buy by analyst consensus. Further, Netflix stock also comes with 7.7% upside potential thanks to its average price target of $466.39 per share.
