S&P Upgrades Netflix on ‘Accelerated’ Shift in Streaming Video Adoption
That the “secular shift” toward streaming video adoption “accelerated heavily” in 2020 amid COVID-19 spurred S&P to upgrade Netflix to BB+ from BB, said the ratings service Tuesday. Consumers “spent more time at home and consumed increasing amounts of in-home…
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entertainment,” said S&P. “All streaming services benefitted from this trend, but Netflix, the leader in the sector, saw an unprecedented shift.” The company ended 2020 with 203.7 million subscribers, compared with S&P’s guidance of 195 million. Netflix had 8.51 million global net subscriber additions in Q4, beating its Oct. 20 forecast by nearly 42% (see 2101190066). S&P doesn’t expect Netflix to “revert” back to pre-2020 “metrics” because the pandemic “accelerated the adoption of streaming video services globally,” it said. “This should mitigate the impact of increasing competition as many new streaming services launched over the past year” or so, including Disney+, HBO Max and Peacock, it said. The analysis didn’t factor in the possible impact of Netflix price increases being phased in over the next 30 days. Netflix emailed subscribers in recent days that it will raise the premium tier by $2 to $17.99 monthly and the standard plan by $1 to $13.99. The increases take effect in late February.