Sam Boughedda

Investing.com — Needham analyst Laura Martin wrote Monday that Netflix Inc. (NASDAQ:) could not win the streaming wars given its current strategy.

The analyst reiterated an Underperform rating and said Netflix needs to “add a second, lower-priced option to compete with Disney+, discovery+, Apple+, Hulu, Peacock, and Paramount+, each of which have $5-$7/month (or free) streaming services.”

Martin stated that in order to increase revenue and grow its market share, Martin suggested adding an advertising tier and buying an older media library. He also recommended adding sports to the platform and adding news and sport to its existing content.

Furthermore, Martin reported findings from Needham’s survey of over 500 Netflix users in the U.S. 

Results showed that just 50% of U.S. subscribers were happier with Netflix content this year compared to one-year ago. Meanwhile, Netflix is viewed by 81% (and 71% pay) for its services, which suggests that the future of U.S. subscription growth may be less promising.

Needham also stated that U.S. streaming has reached maturity, with 70% of its subscribers saying they won’t pay extra services by 2022. However, the company’s subscribers are “rich.”

Netflix shares dropped below $400 Monday, but bounced back to the same level at $407 on Tuesday. That’s a drop of just 1%. Following the release of muted Q1 guidance, Netflix shares plunged heavily.