Should Netflix Investors Be Worried About More Competition?

It was in 2013 that Netflix‘s (NASDAQ:NFLX) first original series, House of Cards, debuted to a global audience. Ever since, the streaming giant has been winning awards and capturing viewers with its edgy-yet-entertaining original series and movies. But recently, it’s not the only streaming service garnering award nominations, and shareholders might be wondering what’s up. On a Fool Live episode recorded on July 14, Fool contributors Toby Bordelon and Brian Withers discuss whether Netflix has lost its creative content mojo.

Brian Withers: I love Netflix, but I can’t help but think the streaming space is getting crowded. I have more boxes on my Roku to pick from nowadays. One more piece of evidence of this streaming market that’s getting crowded is the Emmy’s, most recently Disney, HBO Max, and Apple TV, all of which are less than just recently, a couple of years old now. Disney+ won 71 Emmy nominations, HBO won 36, and Apple TV 34. Netflix accounted for 60% of all streaming nominations last year, but this year it’s down to 40%. You got to wonder, is Netflix losing its mojo?

Toby Bordelon: No, I don’t think so. I think what you’re seeing is that there’s more competition in the streaming space. Some 40% is still a big portion of that, and I think that’s fine. We’ve got to remember, so Disney is new to streaming space, I think in 2019, only The Mandalorian, that was the only original show they had. Everything else has been 2020, 2021. But it’s Disney, they’ve been around forever, and they know how to make movies that attract big audiences, and win awards, and get critical acclaim on, also on regular television.

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I think what you’re seeing, HBO is very similar. HBO makes critically acclaimed shows. It’s just recently they have the streaming service, now Disney is the same way. Disney+ is new. You’re seeing competitors who know what they are doing and have a long history of success now in streaming, and so that ratio is going to change. Netflix isn’t the only one playing in that space anymore in terms of awards.

That’s all that’s going on. I don’t think they’re losing their mojo, now they’re competing directly with Disney instead of ancillary.

Withers: Yes. It’s a little bit in the streaming space, but you definitely have some wonderful players that create great content. HBO has been around since, I remember when I was a kid even, and Disney has been around even longer.

Bordelon: With Disney and HBO going full-steam in streaming, now the fact that Netflix still gets about 40% [laughs] of the streaming space is really impressive.

Withers: Yeah. You’re right.

Bordelon: You consider that, I think they’re fine.

Withers: I’m waiting for the next season of Stranger Things. That’s what I’m looking for.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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