Piper Jaffray analyst Michael Olson says that while Disney (DIS) ending its agreement for distribution of certain content is a negative headline, it will have minimal impact on the Netflix (NFLX).
His firm surveyed over 500 U.S. Netflix subscribers and asked what percent of their Netflix time is spent on Disney. Piper found that "only" around 20% of subscribers spend greater than 10% of their Netflix time viewing Disney content. The analyst expects "almost none" of the remaining 80% of subscribers will cancel due to the loss of Disney. Further, the 20% of heavier Disney viewers are unlikely to cancel unless Disney accounts for a large portion, like greater than 40%, of their Netflix viewing time, Olson tells investors in a research note. He points out that Netflix shares are down 4% since Disney's announcement on August 8. The analyst keeps an Overweight rating on Netflix shares with a $215 price target.
The streaming service closed Friday up $2.26 to $171.40.
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