Streaming media figures getting into sports coverage is turning into a hot-button issue, and Netflix (NASDAQ:NFLX) is turning out to be no different. In fact, Netflix dropped fractionally in the closing minutes of Thursday’s trading session after word emerged about a new deal with Fox (NYSE:FOXA) that left out a normally key metric: TV ratings.
In most cases, advertising is sold based on a few critical metrics. This often includes a certain guarantee about audience size based on research into past similar events. However, Fox and Netflix collaborated on a completely different kind of ad during one of Fox’s Sunday afternoon NFL events.
The event brought together Julian Edelman, wide receiver for the New York Patriots, to talk to Zack Snyder about “Rebel Moon” for two minutes. Instead of audience size, Netflix paid based on social media engagement that involved the segment in some way. This is reasonable enough, especially given the impact of social media on marketing. Yet, it represents a significant departure from the norm.
Maybe You Don’t Need a Nielsen Rating to Sell Advertising
While Netflix is reconsidering how it buys advertising, it also has to reconsider selling it. Perhaps it’s trying to demonstrate that you don’t need a Nielsen rating to sell advertising on shows. After all, there’s the issue of the upcoming Tyson/Paul fight, and Netflix will start running World Wrestling Entertainment’s “Raw” series starting next year.
Some have even begun wondering if Netflix will use this as the springboard to become a major player in sports streaming, which will put it into direct competition with a range of other providers. Yet, with Netflix able to influence media buys and sports content alike, as seen with its recent NASCAR documentary, we may be looking at a seismic shift.
What Is the Prediction for Netflix Stock?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on NFLX stock based on 27 Buys, 13 Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 112.39% rally in its share price over the past year, the average NFLX price target of $581.98 per share implies 6.49% downside risk.
