Now Streaming: Amazon CEO says Prime Video has positive impact on Prime business

“Now Streaming” is The Fly’s weekly recap of the stories surrounding the biggest content streamers.

PLAYING THIS WEEKEND: Among this weekend’s new streaming content on Warner Bros. Discovery’s (WBD) Max is the first episode of season two of horror drama “The Last of Us,” based on the PlayStation (SONY) video game franchise of the same name, and the first episode of season four of comedy series “Hacks.” Netflix (NFLX) subscribers can catch the new season of sci-fi anthology series “Black Mirror,” while Hulu users can watch the new season of “The Handmaid’s Tale.” Meanwhile, Disney+ (DIS) subscribers can access the new series of “Doctor Who,” while Apple TV+ (AAPL) subscribers can watch black comedy crime drama “Your Friends and Neighbors,” starring Jon Hamm and Olivia Munn.

WARNER BROS. BOARD CHANGE: Warner Bros. Discovery announced Friday that Dr. John C. Malone has decided not to stand for re-election to the company’s Board of Directors and will be transitioning to the role of Chair Emeritus, effective upon the expiration of his term at the 2025 Annual Meeting of Stockholders. As Chair Emeritus, Dr. Malone will continue to regularly attend Board meetings and provide strategic counsel and support to the Board and management team. Warner Bros. Discovery intends to nominate Anton Levy for election by stockholders at the Annual Meeting. With the addition of Levy and Dr. Malone’s decision not to stand for election, the Board will continue to be comprised of 13 directors, 12 of whom will be independent, following the Annual Meeting.

PRIME VIDEO: In an interview with CNBC earlier this week, Amazon (AMZN) CEO Andy Jassy said that Prime Video has had positive impacts on the overall Prime business, adding that he believes Video will be a “really good standalone business” as well. Jassy also noted that Thursday Night Football has been “really successful” and that Prime will continue to invest in sports.

ROKU UPGRADE: On Monday, Redburn Atlantic upgraded Roku (ROKU) to Buy from Neutral with a $100 price target. The firm said the company has “defensive attributes” with $2.2B of cash, which should rise to $3.7B by 2027, and with 40% of costs variable. The shift of advertising dollars to connected TV will continue to progress and will likely accelerate if macro headwinds worsen, the analyst tells investors in a research note. Redburn believes Roku has reached a level of financial maturity where it can now be valued on EBITDA and free cash flow multiples, “for the first time providing a valuation floor to the stock.”

NETLIX ‘TOP PICK’ AT MORGAN STANLEY: Earlier this week, Morgan Stanley named Netflix as new “Top Pick” in media and entertainment, displacing Disney, as applying “a more defensive lens to our M&E coverage leaves us incrementally bullish on Netflix.” The analyst expects Netflix to demonstrate relative resilience in a weaker global macro backdrop, arguing that momentum in its core subscription business, combined with recent U.S. dollar weakness, should de-risk FY25 estimates, even in a softer ad market. The firm has an Overweight rating and $1,150 price target on Netflix shares.

Meanwhile, JPMorgan lowered the firm’s price target on Netflix this week to $1,025 from $1,150 and maintained an Overweight rating on the shares. The firm reduced estimates, multiples, and price targets on 25 companies across its internet coverage based on the tariff impact, macro headwinds, and a potential recession. JPMorgan economists suggest a 60% chance of recession in 2025 and that U.S. real GDP declines in the second half of 2025, the analyst tells investors in a research note. The firm believes e-commerce, online travel, and digital advertising names are the most exposed. Streaming subscriptions, cloud, and rides and food “should prove relatively more resilient,” JPMorgan predicts. “There is no macro immunity in the Internet space, only degrees of resilience,” the firm writes.

KeyBanc also lowered the firm’s price target on Netflix to $1,000 from $1,100 and kept an Overweight rating on the shares. The firm’s ad agency checks are deteriorating, with budget growth expectations now landing in the 3%-5% range. While digital ads should generally outpace the market by 2-3 turns, KeyBanc is incrementally cautious that ripple effects on supply chains and consumer spending could pressure margins and EPS across the group.

STOCK PLAYS: Other publicly traded companies in the space include FuboTV (FUBO), AMC Networks (AMCX), Fox (FOX), Paramount (PARA), and Comcast (CMCSA).