Netflix could lose 10 million subscribers next year if it doesn't cut prices, Needham analyst says

Key Points
  • Netflix will lose 10 million subscribers in 2020 if it doesn't lower its prices, predicts Needham.
  • Streaming launches from NBC, Disney and Apple are all set to offer lower prices than Netflix.
  • "NFLX's balance sheet cannot withstand lower revenue," says Needham's Laura Martin, who has a hold rating on the stock.
A button for launching the Netflix application is seen on a remote control in this photo illustration in Warsaw, Poland on April 25, 2019.
Jaap Arriens | NurPhoto | Getty Images

Netflix needs a cheaper option to survive the streaming wars, according to Needham.

The firm said the streaming platform needs advertising dollars to supplement about half of Netflix's current subscription cost.

"NFLX's price point is too high given the competitive streaming landscape. We project NFLX will lose 10mm US subs during 2020 unless it offers a service prices below its core $13/month service," Needham analyst Laura Martin said in a note to clients on Friday.