Why Amazon and MGM Deal Is Bad for Netflix ?

  Why Amazon and MGM Deal Is Bad for Netflix ? Amazon's (NASDAQ:AMZN) acquisition of MGM Studios for a record $8.4 billion has created a strong competitor for Netflix (NASDAQ:NFLX). Netflix added less than 4 million new subscribers in the first quarter and announced that its second-quarter expectation was only 1 million. According to analysts; Amazon's deal with MGM MGM (NYSE) $43.33 -0.06(-0.14%)obliges Netflix NFLX (NasdaqGS) $500.43 +1.35(+0.27%) to show that it can continue to grow in the remaining half of the year. Still, there are some limits to how many services consumers can subscribe to. While Netflix is ​​often seen as one of the top choices, Benchmark analyst Matthew Harrigan said in a research note: “Global video streaming on Netflix is ​​becoming less and less polarized. In this case, competing services may appear much more competitive.”

Amazon's (NASDAQ:AMZN) acquisition of MGM Studios for a record $8.4 billion has created a strong competitor for Netflix (NASDAQ:NFLX).

Reliable analyst Matthew Thornton also made comments supporting this view, saying that Amazon's Prime Video is now a tougher competitor. Piper Sandler analyst Thomas Champion said he believes this could become a bigger problem in the future. Its deal with MGM gives Amazon AMZN (NasdaqGS) $3,230.25 +11.60(+0.36%) even more opportunities to access quality content. This may cause Netflix to lose a lot of content. With all this in mind, Netflix will need to produce more original content.  

Source: The Motley Fool

 

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