Netflix To Lose The Office In 2021, Top Executive Steps Down

Netflix (NASDAQ:NFLX) is set to lose hit show The Office to Comcast-owned NBCUniversal beginning 2021. Per data analytics firm Jumpshot, quoted by CNBC, The Office was the most-watched show on the streaming platform in 2018.

Meanwhile, the company lost Matt Brodlie, its director of original film to Disney (NYSE:DIS) . Notably, he was instrumental in releasing notable films like Ibiza and Roma on the platform.

Matt Brodlie will join as the senior vice president of international content development at Disney’s upcoming streaming service Disney+.

However, both news didn’t have much negative impact on share price, which inched up 0.5% to close at $362.20 on Jun 26. Netflix shares have returned 35.3% on a year-to-date basis compared with industry’s growth of 24.8%.

NBC Outwitted Netflix for The Office

Reportedly, NBC, which is a division of the NBCUniversal, paid $500 million to its sister company and one of the producers, Universal Television, to win the exclusive domestic streaming rights of the show.

NBC’s $100 million per year offer was better than Netflix’s $90 million per year. The company will include the show in its ad-supported upcoming streaming service in 2020.

Notably, NBC’s service is free to subscribers of pay-TV services and reportedly will cost streaming service users (cord cutters) $10 per month.

Will Stiff Competition Hurt Growth?

Netflix’s portfolio strength has been expanding its subscriber base that hit 148.8 million at the end of first-quarter 2019. However, the company’s dominance in the streaming market is threatened by the entry of new services from Apple (NASDAQ:AAPL) , Disney, Comcast (NASDAQ:CMCSA) and AT&T (NYSE:T) .

Content providers with upcoming streaming services are now looking to remove their popular movies and shows from Netflix. Disney is set to pull its movies and shows from the platform ahead of the launch of Disney+ in November.

Netflix is also anticipated to lose another hit show Friends to AT&T’s WarnerMedia, once the service launches.

Although intensifying competition and loss of popular third-party content don’t bode well for the company, we believe an expanding original content portfolio to be a key catalyst.

Moreover, efforts to attract viewers by investing more in regional programming and partnerships with telcos like Telefonica (MC:TEF) in Spain, KDDI in Japan, Comcast and T-Mobile in the United States, and Sky in the U.K. and Germany are major growth drivers.

Netflix expects to have 153.86 million paid subscribers globally in second-quarter 2019, up 23.7% year over year.

Netflix currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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