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Why Netflix Might Be Able To Redeem Itself In Q1

Netflix ( NFLX ) shares are now starting to make a comeback after the news that its fourth-quarter U.S. subscriber growth missed expectations. The stock fell as much as 22% in the weeks following the news, despite strong overall subscriber additions. But with a new Baird survey  pointing to “solid” U.S. subscriber results in Q1, Netflix may be able to redeem itself come its next quarterly report in about two weeks. Baird said that the strong Q1 U.S. subscriber numbers can be attributed to the recent launch of new seasons of successful Netflix originals including “House of Cards” and “Daredevil.” Shares are climbing 3% in volume that’s tracking a little lighter than average Tuesday. The stock retook its downward-sloping 50-day line earlier this month and is now approaching the 200-day line. Netflix dropped below that level in the wake of the report of its weak Q4 subscriber growth. For Q1, analysts expect earnings to fall 20% amid rising costs, while revenue jumps 25%. Netflix is seen as the leader in video streaming, with an expanded global rollout announced in January. But it’s facing increasing competition as others start to take advantage of the cord-cutting trend. Competitor Hulu, a joint venture among Disney ( DIS ), Comcast ( CMCSA ) and 21 st  Century Fox ( FOXA ), is starting to create its own original content. Hulu and Netflix have both recently launched virtual reality apps that work with Samsung Gear VR, powered by Facebook ( FB )-owned Oculus. The high-end Oculus Rift headset began shipments this week. Disney was up 0.2% Tuesday, Comcast added 0.9%, and Fox was essentially flat. Facebook climbed 2.1%.

Mom Survey: Upside For Netflix, Toy Makers, Disney In Media Trends

Netflix ( NFLX ) has a growing audience among kids, and there’s upside in merchandising for programming partners Dreamworks Animation, Walt Disney ( DIS ) and others, says a Piper Jaffray report on trends in family media and toy purchases. According to the Piper Jaffray survey of 428 mothers on media and consumer products, Netflix accounted for 19% of kids’ video viewing, up from 14% a year earlier. “We believe Dreamworks ‘ ( DWA ) massive output deal to Netflix positions the company right in the center of a paradigm shift in youth entertainment,” said Stan Meyers, a Piper Jaffray analyst. Netflix has been investing in kids’ programming , including deals with Disney and Dreamworks. Piper Jaffray has buy ratings on Dreamworks, Disney and toy-maker Hasbro ( HAS ). It rates Mattel ( MAT ) at neutral. UBS, meanwhile, initiated coverage on toy makers Thursday, rating Mattel a buy with a price point of 36. UBS rates Hasbro neutral. IBD’s Leisure Toys-Games group is ranked No. 47 out of 197 industry groups. Hasbro has a Composite Rating of 94 out of a possible 99, while Mattel’s CR is 87. According to the Piper Jaffray survey, frequent moviegoers spend $481 annually on toys, 90% more than the occasional moviegoers. Nearly 80% of mothers picked Disney and its Pixar unit as their most preferred brand when selecting a film for their child.

Apple Gains In Morgan Stanley Online Video Survey, Netflix Tops

Most cord-cutters still replace cable TV services with Netflix ( NFLX ) — no surprise there — but Apple TV gained in an annual Morgan Stanley survey of consumers who watch Internet video. Apple ( AAPL ) rolled out its fourth-generation TV hardware in late 2015, but it has shelved plans, at least temporarily, for a Web-based TV service amid stalled negotiations with programmers. The Apple TV streaming device costs from $149 to $199. Apple customers can subscribe to Netflix, HBO and full-season sports subscriptions as well as watch movies and TV shows served up from the iTunes store. Among those planning to cancel pay TV subscriptions, some 35% of the 2,500 consumers surveyed say they are most likely to switch to Netflix, says Morgan Stanley.  That’s down from about 40.7% in the year-earlier study. Apple TV moved up to 23%, from about 17% a year earlier. YouTube, the video website of Alphabet ( GOOGL )-owned Google figures two ways in the survey, in which respondents could give more than one answer. Some 20% of respondents said they might replace pay TV with YouTube Red, the new subscription service, while 29% cited the free, ad-supported version of YouTube. Amazon.com ’s ( AMZN ) online video service and Hulu were tied at 27%, with Time Warner ’s ( TWX ) HBO Now service right behind, with 25% of pay TV subscribers saying they were likely to switch to the service. “Among those without a pay TV subscription, Netflix usage is meaningfully higher (47%) vs. Amazon Instant Video (21%), suggesting Netflix is viewed as more of a replacement service to traditional pay TV,” said the Morgan Stanley report. “Netflix remains the leading online video platform for TV/film content in the US, with 40% of respondents saying that they use the service, still well ahead of YouTube (33%), Amazon Instant Video (22%) and Hulu Plus (14%).” Hulu is a joint venture of 21 st Century Fox Entertainment ( FOXA ), Walt Disney ( DIS ) and Comcast ( CMCSA ).