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Disney Dropped the Hammer on Netflix by Refusing Advertisments

Disney Dropped the Hammer on Netflix by Refusing Advertisments

5 years ago
Anonymous $MUlyiGRWxa

https://wccftech.com/disney-dropped-the-hammer-on-netflix-by-refusing-advertisments/

Disney (NYSE:DIS) banned Netflix (NASDAQ:NFLX) from advertising on its entertainment networks such as ABC, FX, Hulu, and Freeform while the company takes steps to release its own streaming content service Disney+ to compete with Netflix.  CNBC reports, “We gotta get Netflix the hell out of FAANG,” Cramer said in an appearance on “Squawk on the Street.” “I tell you that right now. I don’t know how to do it.” Netflix shares have fallen 29% this year on increased competition and the loss of much of its popular content which is owned by other companies looking to start their own streaming services.  This action has worked to fracture the content provider marketplace with streaming service announcements bubbling up from all corners of the media landscape in a desperate attempt to monetize content and increase revenues.  

Removing competitor’s ads from its networks makes sense from a Disney business perspective but does it make sense from a public perception one? It’s difficult to determine how much goodwill Disney has in this case when it is a proverbial giant in the entertainment industry with nearly a century of content and countless acquisitions to properties such as Pixar, Marvel and Star Wars.  Netflix, on the other hand, will now be locked out of advertising leading for its services and expected to face declining subscriber counts and revenue and profit while additional spending is going to be required to create quality content that people want to watch. This is what led to the exclamation by Cramer to remove Netflix from FAANG. At this point, there are not enough positive catalysts to see shares appreciate to make it a smart investment. “I’m not a Netflix fan, here,” he said, “there’s too many competitors.”  

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