Home Technology Netflix, Inc. Price Target Upped For Survey Data

Netflix, Inc. Price Target Upped For Survey Data

Netflix is seen by many as a serious threat for linear TV, and indeed its rapid subscriber growth does indicate that it is a force to be reckoned with. The trend in subscriber growth is expected to continue, not only in the U.S. but in international markets as well, as indicated by a recent survey.

Raymond James ups Netflix target

Raymond James analysts Justin Patterson and Aaron Kessler and associate Yena Jeon conducted a survey on TV viewing in conjunction with Frank Louthan and Simon Leopold, and after analyzing the data, they have increased their price target on Netflix from $120 to $140 per share. Following their price target increase, shares of Netflix rose as much as 1.45% to $125.13 per share during regular trading hours.

The survey covers a fairly small sample of about 590 consumers. Analysts found that about a third of consumers are willing to consider “lower priced video packages,” while 58% would consider paying between $20 and $30 per month for a video package with the channels they watch the most often. The Raymond James team suggests that this suggests consumers would be interested in what they call a “‘skinny’ package,” which they think would complement Netflix’s streaming service.

Streaming gains TV time share

They point out that linear TV still has an important place in media entertainment as it still rules in the area of real-time content. However, more and more consumers are starting to increase the amount of time they spend on streaming content compared to traditional TV viewing.

The analysts found that in terms of total viewing hours, more than half (51%) of the survey’s participants spend more time watching TV, while 31% spend more time watching streaming video and 14% watch each of them about equally. (All graphs in this article are courtesy Raymond James.)

In terms of viewing intent though, the survey found that 29% are planning to stream more video in the next 12 months, while 27% are planning to watch less TV.


Why Netflix is a leader

The Raymond James team gave a list of the “4 C’s,” which they said is why Netflix is a dominant player in the streaming industry, trailing YouTube by just 1 percentage point. They are convenience, cost, commercial-free and content.” The survey indicated that 61% of participants watch Netflix, compared to 37% watching Amazon, 19% watching iTunes content and 19% watching Hulu’s hybrid subscription/ ad model.


The top four reasons the respondents gave for picking Netflix over the others were the four C’s. Fifty-three percent want to watch content anytime and anywhere while also avoiding commercials. Also 35% want to watch movies while 31% want original content. Thirty-three percent of the survey’s participants were concerned with cost.


The analysts note that Netflix prices its services at between $7.99 and $11.99 a month and believe that the content the company offers is “increasingly of comparable quality” to that offered by HBO and Showtime.