Netflix Inc. Stock Not Shaken By Net Neutrality News
Shares of Netflix, Inc. (NASDAQ:NFLX) have been static over the course of the week ending November 24, and was down 0.30% in late morning trading. On November 21 the Chairman of the FCC, Republican Ajit Pai, revealed plans to scrap Obama-era net neutrality rules.
Netflix stock responded reasonably well to the news, jumping 1% on the same day. Streaming services like Netflix have been some of the more vocal proponents of net neutrality. Net neutrality prevents Internet service providers (ISPs) from slowing or blocking web content. There is a fear among some experts that the larger telecommunications companies could abuse the lack of regulations in order to favour specific types of content.
This is especially touchy considering the performance of large companies like Netflix, and even other streaming providers like Facebook Inc. and Amazon.com, Inc. in U.S. markets. These companies have boomed in the 2010s while telecommunications giants like AT&T Inc. and Verizon Communications Inc. have had to rely on acquisitions to propel growth.
In the third quarter Netflix saw its revenue grow to $2.98 billion and add 5.3 million subscribers, which blew away expectations. Netflix stock has climbed 58.2% in 2017 and 70% year over year. The repeal of net neutrality, which is expected to pass on December 14 when the FCC holds it to a vote, may provoke some anxiety for streaming platforms. In addition to this, Netflix is entering a more competitive environment in which companies like Facebook and Amazon are making significant investments in producing original content.