Apple TV+ is 'no substitute' for Netflix and its stockpile of original programming, Bank of America says

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  • Netflix will remain a leader in the streaming wars despite Apple TV+ offering a far lower price, Bank of America analysts said Tuesday.
  • The streaming company has more than 400 original titles and thousands of other offerings compared to Apple's nine launch titles, making the iPhone producer "no substitute" for Netflix, the analysts said.
  • The team added Netflix's years of dominance in the streaming business leave it with a "secure" position ahead of Apple and Disney launching their competing services.
  • Watch Netflix trade live here.

Apple is reportedly spending $6 billion on original programming for its Apple TV+ service, but it can't match Netflix's extensive catalogue, Bank of America Merrill Lynch analysts said in a Tuesday note.

The iPhone maker revealed Tuesday it will launch its streaming service November 1 for $4.99 per month. Apple also revealed it will give iPhone, iPad, Apple TV, and Mac customers a free one-year trial of the service. Apple TV+ will launch with nine original titles.

The price falls well under Netflix's offerings, which start at $8.99 per month for a "Basic" plan and hit $15.99 per month for its top-tier service.

However, the streaming company's collection of more than 400 original series titles will keep it from losing too much market share to Apple, the analysts said. The note also cited SNL Kagan data showing nearly 4,000 movies and 1,828 series available on Netflix.

Apple is "likely to be hit-driven in the near term" while Netflix continues to produce series well-known among consumers, the analysts wrote.

"Until Apple's content library gains scale to compare to Netflix or Amazon, it is likely as a nice-to-have for Apple device users/buyers and no substitute for Netflix's large catalog of licensed content and originals," the team led by Nat Schindler said in the note.

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Netflix will remain a leader in the streaming wars as its "incumbency and growth outlook remain secure," the team added. The company's 157 million streaming subscribers give it a healthy lead over looming competition, with Disney's service also not launching until November.

Netflix shares have fallen nearly 18% in the last three months as subscriber growth slowed and its second-quarter earnings disappointed analysts. Bank of America reiterated its "buy" rating Tuesday, and pegged its price objective for the Netflix stock at $450 per share.

The streaming company traded at $290.11 per share as of 1:30 p.m. ET Wednesday, up about 8% year-to-date.

Netflix has 31 "buy" ratings, nine "hold" ratings, and four "sell" ratings from analysts, with a consensus price target of $386.51, according to Bloomberg data.

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