Netflix (NFLX) released its much-anticipated live comedy special with Chris Rock on Saturday — but not everyone thinks the streamer’s foray into live events is worth the hype.
“It’s a free publicity move that’s going to have no impact on their business,” Michael Pachter, managing director of equity research at Wedbush Securities, told Yahoo Finance Live on Friday ahead of the special’s release.
“The idea that anybody’s going to turn on Netflix by appointment is idiotic. We don’t even know when regular TV shows are on,” he said, adding the platform has “trained” consumers to embrace on-demand viewing habits.
“Netflix is still Netflix,” Pachter said bluntly. “It’s not going to move the needle. No one is signing up for Netflix to watch this show.”
According to the streamer’s top 10 list updated weekly on Tuesdays, the stand-up special accumulated enough viewing hours to place seventh in the U.S. for the week of Feb. 27-March 5, although it did not garner enough views to crack its global rankings.
Netflix does not break out the exact viewing time by country, only offering figures for the global top 10 list.
Still, the early results were promising given the Saturday night debut and the fact it was only available in English at the time of the premiere. Rock’s special began rolling out in other languages this week.
‘I don’t think live sports is the way to go’
Streaming platforms have been searching for alternative ways to capture subscribers’ attention amid greater competition and a lack of programming, spurred by a pullback in content spending as Wall Street zeroes in on profitability.
Netflix, which spends about $17 billion on content annually, has yet to enter the world of live sports but competitors like Amazon Prime Video (AMZN) and Google’s YouTube (GOOGL) certainly have — securing the rights to NFL’s Thursday Night Football and NFL Sunday Ticket, respectively.
Amazon reportedly agreed to spend $1 billion annually in an 11-year deal while Google coughed up a reported $2.5 billion to acquire the sought-after rights to Sunday Ticket.
“Google is going to fail miserably with the YouTube purchase of Sunday Ticket. I think that’s going to end up being a disaster for them,” Pachter said, noting “there’s no way” Amazon or Google will make money on the purchase.
“I don’t think live sports is the way to go. The sports leagues have established that their rights are worth billions of dollars, and Netflix just doesn’t have billions to spend on that,” the analyst said, reiterating: “We don’t think of Netflix as a by-appointment television broadcaster. We think of them as an on-demand, when we feel like it, and binge the whole thing [broadcaster].”
Pachter maintains an Outperform rating on Netflix with a $410 price target on the stock — suggesting more than 25% upside compared to current levels.
“I love [Netflix’s] spirit,” he said, praising the streamer’s recent move into ad-supported which “will keep people from quitting” at a time when it’s struggled to add subscribers.
“I like that they keep getting up after getting just knocked to the ground. They keep fighting and they keep trying. They had the crap kicked out of them for a brief period of time. They stopped growing subscribers, and they took a look in the mirror and they said, ‘What can we change?'”
“There’s opportunity there for profitability because they’re cutting their spending,” he added. “[So] as long as they don’t do stupid things like bid on sports rights and do really smart things like bid on Chris Rock live so you talk about it, I love the stock.”
Alexandra is a Senior Entertainment and Media Reporter at Yahoo Finance. Follow her on Twitter @alliecanal8193 and email her at [email protected]
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