Netflix (NFLX) officially shed 1,700 videos from its streaming library on Wednesday, as all programming previously available from Warner Brothers, MGM Studios, Allied Artists, and RKO through the company’s online service now become the exclusive material of Time Warner’s (TWX) new video service Warner Archive Classic.
The news put a damper on the last few days of gains made by the company on the heels of last week’s earnings report that was interpreted as a vindication of the company’s recent moves, and particularly its highly successful foray into original programming with the House of Cards series.
The company recently contended with a great deal of skepticism when it decided to release all episodes of the series to users at once. The first quarter earnings report came as a counter-argument, as it showed Netflix beating expectations on earnings, excluding losses, by $0.11 per share.
The company indicated that it had added 2 million new users during the quarter in the United States alone. Further, Netflix claimed that there were only 8,000 cancellations on free-trial initiations, a fact the company would like to see as a result of the turn towards producing its own shows.
Wednesday’s news saw shares struggling during midday trading, down about 2 percent to $211.65 from Tuesday’s closing price of $216.07.
The Warner Archive Classics service will cost users $10 a month, $2 more than Netflix’s service, but might be able to draw subscribers away from the company simply because of the specificity and status of some of its content. The competition will only intensify once Time Warner decides to begin offering newer blockbuster films through the service as well.
Shares for Time Warner Inc. were also down nearly 1 percent, to $59.20.
DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer