Netflix Is Moving Ahead With Its Ad-Supported Version. Should You Buy Now?
Netflix (NASDAQ: NFLX) has partnered with another business to implement its plan to launch a lower-priced ad-supported streaming service tier as early as this year. In choosing Microsoft (NASDAQ: MSFT) to help facilitate and sell advertising, Netflix went with a proven global operator.
Rumors had surfaced that Netflix might pick Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), but the advertising giant has competing operations with its YouTube service. The new tier can boost Netflix's revenue from its U.S. and Canada segment by $1 to $3 billion annually. This is for a company that generated $29.7 billion in revenue in its most recently completed fiscal year. Let's look at the move and determine whether Netflix's stock is a buy.
Netflix is one of the highest-priced streaming services on the market today. Many rivals launched competing services during the pandemic, nearly all at lower prices. That fact, along with slowing demand for in-home entertainment due to the economic reopening, caused Netflix to shed 200,000 subs in its first quarter, which ended on March 31. The loss was just the tip of the iceberg, as the company forecasts a decrease of 2 million subscribers in Q2.
Source Fool.com
