Why it’s Time to Sell Netflix

Netflix, Inc. (NASDAQ:NFLX) has declined by 23% over the past thee months, and things might only get worse next year. With Walt Disney Co (NYSE:DIS) coming out with its own streaming package in 2019 and pulling content from Netflix, online streaming services could get a lot more competitive.

However, I’m not expecting Netflix to come out on top. A lot of the company’s appeal was that it was a one-stop shop for people looking for quality content. But with companies starting to pull content from Netflix, the company will have to rely on its original programming and focus on being a content provider. And if it comes down to content, I’d give a decisive edge to Disney.

Earlier this week, Netflix announced that it would be increasing prices in Canada yet again. Its mid-tier package would increase by nearly 30% and for 4k content you’ll have to pay $16.99, not much higher than CraveTV which offers HBO content. The company says the increase is needed to build more quality content, but it’s going to be a tough sell as Netflix faces more competition and higher prices could drive consumers to other services, or even back to cable.

Since reaching a high of over $420 earlier this year, the stock has been falling steadily and signs are that its best days are now behind it. Netflix was already going to have a hard time keeping customers next year with more competition, and price increases are only going to make that an even bigger challenge.