When Netflix, the first of the so-called FAANGs (Facebook, Amazon, Apple, Netlix and Google), reports Q4 results on Tuesday, investors will want to see how the streaming giant is coping with a wave of competition led by another entertainment heavyweight Walt Disney Co.
Launched last April, Disney+ looks like the most dangerous challenge yet to Netflix’s dominance of an increasingly crowded video streaming market. Netflix shares are down about 8% since then, hit by worries over slowing subscriber growth and the costs of high-budget productions such as The Crown and The Irishman. Disney+, on the other hand, has risen 24%.
Other competitors are on the horizon. Apple’s new streaming service costs $5 per month, less than half Netflix’s monthly standard price. And AT&T will launch HBO Max in 2020.
Investors expect the stock to be volatile. Netflix options imply a 7.6% swing for the shares in either direction by next Friday, Jan. 24. Over the last eight quarters, on average, the shares moved 6% after the company reported results, according to Trade Alert.