William Blair Roots For Netflix, Inc. (NFLX) Following Survey Indicating Clear Value of New Download Feature


On Wednesday, November 30th, Netflix, Inc. (NASDAQ:NFLX) made worldwide subscribers very happy with the news that they now have access to download instead of simply streaming selected content directly to iPhones, iPads, Android phones, as well as tables. In reaction, William Blair analyst Ralph Schackart has conducted a survey to gauge the impact and value of the streaming giant’s new offline viewing functionality.

In the survey, Schackart reached out to 338 respondents in which he asked about their current usage of the similar download capabilities rival Amazon also has offered since 2012 coupled with evaluating how valuable the company’s users expect the same feature to be potentially for the giant’s content.

The 92% who indicated they watch content on Amazon responded that they also watched content on Netflix, compared to the alternate scenario of 72% of those who indicated they watched content on Netflix also noting they watched content on Amazon.

The analyst opines, “While the survey’s primary intent was to gauge how valuable the new download-for-offline-viewing feature is for subscribers, we nevertheless find it constructive to call out that a majority (63%) of respondents indicated they engaged with content on both platforms.”

“Moreover, the crossover for Netflix users with Amazon was significant at over 90%. This lends support to our view that the over-the-top streaming (OTT) market for long-form content has room for multiple players. Eighty-eight percent of respondents indicated they watch content on Netflix versus 69% in the case of Amazon Prime Video,” Schackart asserts.

Furthermore, the survey demonstrated that 78% of Netflix user respondents revealed they intended to use the company’s new download feature capabilities, which to the analyst “signals a high degree of relevance.” In fact, 5% who responded asserted they had plans to use the download content on a daily basis.

Interestingly enough, 38% of Netflix user respondents expressed they were prepared to pay to use the capability, to which Schackart adds, “We found this result especially surprising in light of the fact that many respondents already knew that Amazon offered this feature for free.”

Ultimately, half of the respondents who were Netflix users have made it clear this new feature makes a Netflix subscription cancellation less likely, with 71% contending the new download feature actually makes their subscription service as a whole all the more valuable, further supporting the analyst’s perspective of heightened relevance for the feature.

As Netflix Original Series landed the most preferred content category spot when it comes to offline viewing, with over half vying in Netflix’s favor, Schackart sees the giant in a stellar position. Therefore, the analyst reiterates an Outperform rating on NFLX without listing a price target.

As usual, we like to include the analyst’s track record when reporting on new analyst notes to give a perspective on the effect it has on stock performance. According to TipRanks, four-star analyst Ralph Schackart is ranked #533 out of 4,240 analysts. Schackart has a 59% success rate and realizes 9.4% in his yearly returns. When recommending NFLX, Schackart yields 9.3% in average profits on the stock.

TipRanks analytics exhibit NFLX as a Buy. Based on 37 analysts polled in the last 3 months, 20 rate a Buy on NFLX, 11 maintain a Hold, while 6 issue a Sell. The 12-month average price target stands at $123.29, marking a 3% upside from where the stock is currently trading.