41% of Netflix subscribers plan to keep the streaming platform post Covid: RPT

According to a new report from Piper Sandler, 41% of Netflix subscribers plan to keep the streaming platform post the coronavirus pandemic and despite price changes. Yahoo Finance's Ines Ferre breaks down the details with Brian Sozzi on The First Trade.

Video Transcript

BRIAN SOZZI: A new note out this morning from Piper Sandler is giving us an inside look at the future for Netflix subscriptions post-COVID and future price changes. Ines Ferre is back here with those deets. Ines, I don't want to pay more for Netflix, but admittedly, I probably would.

INES FERRE: You probably would. And the big question has always been for these stay-at-home plays is would it subscribers continue on would these subscriptions after COVID-19, after the restrictions are eased?

So Piper Sandler came out with a note citing a survey that they did of a thousand respondents, and 41% of them said that they do plan to keep Netflix after COVID-19 restrictions ease. Now this is despite competition from Disney+, HBO Max, a slew of others.

So you've got 41% of respondents who chose Netflix. You had second place coming in with Amazon with 28% of respondents.

Also in a separate survey, to your point about the price, the majority of subscribers said that they would absorb an increased cost of $2.20 a month. So you could increase it by $2.20, and they would still keep that service.

So Piper Sandler is reiterating its overweight rating, maintaining its price target of $534 on the stock. Netflix year to date is up 51%.

I also do want to mention about the subscriptions because we had heard guidance from Netflix last quarter that even though they had these 10 million subscribers worldwide, global subscribers that smashed expectations, the company did indicate that you could see a little bit of a slowing down of that in the second half of the year, saying we expect less growth for the second half of 2020 compared to the prior year.

Well, the note also addressed that issue, saying that Netflix is the go-to streaming option. And it said "while we recognize some of the record-setting sub adds were pulled forward, the trend was an acceleration of an ongoing shift from broadcast TV to streaming."

So basically, yes, some of these are pulled forward, but you still have this trend that happened because of COVID-19, this acceleration of people just getting away from broadcast and going straight to streaming, Brian.