Apple TV Plus, Disney Plus Already Beating Netflix? Stock Loses 46% Gain

The once high-flying stock of Netflix Inc. plummeted into negative territory Monday, capping a breathtaking two-month long plunge that wiped-out all of its 46 percent gain for the year at its peak. And things are bound to get worse for the embattled streaming media giant.

Netflix's year-to-date return or performance is down -0.65 percent and is underperforming the overall stock market by -19.84 percent. The long-term, mid-term and short-term outlook for Netflix remains grim, and is set to deteriorate as competition from deep-pocket rivals such as Apple Inc. and Amazon.com stiffens, according to some analysts.

The second-half of the year has been one long episode of bad news for Netflix. It followed a dismal second quarter that saw the company's stock suffer its longest losing streak in five years.

Netflix, which was practically competition free when it started streaming video 10 years ago, is now faced by a bevy of heavy-hitters offering cheaper subscription rates and quality programming. Tech and media companies such as Apple, Amazon, The Walt Disney Company, NBC and WarnerMedia from AT&T are now cutting into Netflix's once hefty market by resorting to cheaper priced services.

Only a few weeks ago, Apple announced Apple TV Plus, its streaming TV service, will cost only $4.99 a month. Disney earlier said it will offer high definition streaming as part of its standard $6.99 plan for its new Disney+ service. Netflix’s basic plan still stands at $8.99 per month.

Netflix raised subscription prices from 13 percent to 18 percent in January, leading to a surge in its stock price. That price hike is now being increasingly viewed as a bad move in the face of much cheaper competition, especially from Apple whose service is 80 percent cheaper than Netflix's. Netflix stock has taken the hit as a result.

Netflix is “very expensive” under a new valuation framework for growth, according to Netflix bull Kannan Venkateshwar, a Barclay's analyst. Nomura Instinet analyst Mark Kelly believes the increased competition now battering Netflix will “take away engagement,” “make content more expensive,” “or diminish the price power Netflix has exhibited for several years.”

Also adding to Netflix's mounting woes is an unprecedented slump in U.S. subscribers and a substantial drop in international subscriber numbers in Q2. These heavy doses of downbeat news sent Netflix stock plunging and being hit by its longest losing streak in five years.

There are also problems in the content side of the business. The company's most popular show, “The Office,” was taken away by NBC.