May 20, 2022
Disney+ streaming service

The weak first-quarter subscriber outlook released by Netflix, that prompted Wall Street to lower its ratings for the company, has also had a knock-on effect for competitors Disney and Roku.

Netflix reported quarterly earnings of $1.33 per share, flying past the analyst consensus estimate of $0.82. The online streaming giant fell short on new subscribers though, falling short of the company target of 8.5m net new subscribers with just 8.3m signing up in the fourth quarter.

And for the first quarter of 2022, Netflix has said it expects to add 2.5m new subscribers, far below analyst forecasts of 5.7m.

Shares of Netflix fell by more than 21% on the back of the news, but the effects were felt by other companies in the sector as well. Disney stock was down by 5.8% whilst Roku, who manufacture streaming devices, fell by 7.4%.

The announcement by Netflix has been perceived by some more cautious investors as a statement about the direction that the online streaming industry as a whole is moving in, which has prompted sell-offs.

The numbers suggest that such moves may be hasty though, with streaming services more popular as ever according to data. More likely is that Netflix’s poor showing is down to competitors taking market share from the firm, with the options available on the market becoming more plentiful by the day.