Netflix's Attempt to Ditch Apple Helps Snap Losing Streak
(Bloomberg) -- Netflix is erasing a six-day losing streak after a report that it’s pushing users to subscribe on its website, rather than through the app -- pulling revenue from app-store owners like Apple.
The entertainment streaming company is also benefiting after a bullish analyst note, which predicted international subscriber additions would exceed expectations in the second half of the year by at least 10 percent. Shares gained 3.7 percent Tuesday.
Currently, Netflix users on iPads and iPhones have the option to subscribe via the App Store’s in-app-purchase system. This makes subscribing to Netflix simpler for Apple users, but also gives Apple a 15 percent cut of those subscriptions. Netflix told TechCrunch that it’s testing a change that bypasses in-app subscriptions in countries such as the U.K. and Brazil, and instead re-routes users to its own website. The test will run through Sept. 30.
A particularly strong lineup of original content should help the company outperform expectations for international additions by about 1 million in the second half of 2018, said William Blair analyst Ralph Schackart, who rates the stock outperform.
Netflix has fallen 15 percent since reporting subscriber additions in the second quarter that missed Wall Street estimates by nearly 1 million users on July 16. The Los Gatos, California-based company had been the best performing stock in the S&P 500 this year as recently as last month. It’s still up more than 77 percent in 2018.
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