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Will Netflix's (NFLX) Cuties Debacle Aid New Streaming Peers?

A campaign waged against Netflix NFLX over Cuties (“Mignonnes”) and the film’s portrayal of children has sparked a surge in the streaming platform’s subscription cancellations in the United States.

Since the film’s release on Sep 9, over 600,000 people have signed a petition requesting that Cuties be removed from Netflix and that the streaming giant be charged for exploiting minors. The Council on American-Islamic Relations (CAIR) issued a statement calling on Netflix to remove Cuties from its platform.

Per subscription analytics company Antenna,

in the United States jumped to nearly five times higher than the average daily levels recorded in the past 30 days just five days after the release of Cuties on its platform when the hashtag #CancelNetflix became the top-trending spot on Twitter.

The movie, which is rated “TV-MA” (for mature audiences) for explicit language, follows an 11-year-old Senegalese girl living in Paris who joins a free-spirited dance crew (called the Cuties) to rebel against what she perceives as her Muslim family’s oppressive traditions.

Netflix has defended Cuties arguing that it is a social commentary that makes the case about the dangers of sexualized imagery of young girls. Markedly, the film has been among the top-viewed movies on Netflix since its release, fueled by the controversy surrounding it.

The reported spike in Netflix subscription cancellation should encourage new entrants like AT & T’s T HBO Max, Disney’s DIS Disney+, Comcast CMCSA division NBCUniversal’s Peacock and Apple’s AAPL Apple TV+ in the increasingly crowded streaming space.

Year to Date Performance

Netflix Dominates Streaming Space

Undoubtedly, Netflix is dominating the streaming space. As of the end of June, this Zacks Rank #4 (Sell) company had 193 million paid streaming customers worldwide. That’s after Netflix netted about 25.9 million new subscribers worldwide in the first six months of 2020, with the coronavirus pandemic spurring record signups.

Backed by a solid content portfolio, which included an attractive slate of original productions as well as regional shows, Netflix set a record with 160 total nominations at Sunday’s Emmys Award, but landed 21 of those in the end that included best supporting drama actress for Julia Garner in Ozark.

Netflix is set to release action-thriller Welcome to Sudden Death, horror comedy Vampires vs. the Bronx, romantic thriller Rebecca, romantic comedy Ginny Weds Sunny, musical drama The Prom and crime drama Oloture among others in the rest of 2020 with at least 30 originals under production for 2021.

Disney’s Solid Content Portfolio a Potent Threat for Netflix

Disney+, the most successful thus far of the new crop of streamers, has surpassed 60 million subscribers, four years ahead of its goal of reaching between 60 and 90 million by 2024. Disney’s streaming subscriptions now top 100 million, including Hulu, and faster-than-expected growth of ESPN+. Disney currently has a Zacks Rank #3 (Hold).

Markedly, Star Wars series The Mandalorian, a show on the Disney+ streaming service about a bounty hunter who protects Baby Yoda, won eight awards at the Emmy awards.

Disney+ is coming in strong with High School Musical: The Musical: The Series, and plans for a Lizzie McGuire sequel series with Hilary Duff. Moreover, upcoming titles like Star Wars: Rise of Skywalker and Maleficent: Mistress of Evil will go live within the year.

Other Contenders to Watch Out For

AT&T’s HBO Max streaming service launched in May helped grow the overall pool of HBO and HBO Max customers by 1.7 million in the first half of the year. This Zacks Rank #3 company reported a total 36.3 million subscribers between the two services.

Recently, HBO network dominated Emmy Awards with 30 wins, including best drama for Succession and limited series Watchmen. HBO Max plans to add a total 31 original series in 2020 including the upcoming drama The Flight Attendant, crime drama The Murders at White House Farm and dating show 12 Dates of Christmas among others, growing to 50 series in 2021.

Additionally, Apple TV+, launched last November, captured its first Emmy, for Billy Crudup’s supporting turn in The Morning Show. It was the first major acting win at the Primetime Emmys by a streaming service in its first year.

Apart from recent releases of Boys State and Ted Lasso, the iPhone-maker has a handful of blockbusters lined-up such as Emancipation, the in-development Will Smith film it recently acquired for around $105 million. Apple carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other movies that Apple TV+ is looking to premiere include Shantaram, a series that is based on the New York Times bestseller novel from Min Jin Lee, and Uma Thurman-starrer Suspicion based on the award-winning Israeli series, False Flag.

Meanwhile, the entry of Peacock’s new low-cost and ad-based subscription service is a game-changer. The free tier offering will help Comcast, another Zacks Rank #3 company, attract advertisers, once the impact of coronavirus dies down.

Peacock reported 15 million signups and intends to hit 30 million to 35 million by 2024. Peacock’s offering includes a free, ad-supported tier limited to a range of 75K hours of content. Additionally, a $4.99 premium, ad-supported tier with 15K hours of Peacock content and an ad-free premium tier that costs $9.99 per month are available.

The platform is the exclusive streaming home of The Office and Parks and Rec, and it will host Tokyo Olympics, which was postponed due to coronavirus. Peacock’s full content line-up includes a mix of shows from the NBCUniversal empire, new original content and select movies ranging from the Despicable Me franchises to Knocked Up.

Moreover, Peacock will gain access to Showtime's Ray Donavan and The Affair, the original series Charmed, Everybody Hates Chris, The Game, Undercover Boss and Real Husbands of Hollywood. Of all the series, only Charmed is slated for a debut in October 2020.

These Stocks Are Poised to Soar Past the Pandemic

The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.

Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.

See the 5 high-tech stocks now>>


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