Netflix, a leading player in global streaming, is familiar with taxes such as Europe’s Digital Services Tax (DST), which it has been paying in the U.K., France, and Spain since 2019. However, new trade war tariffs in the U.S. may pose a challenge.
Laurent Yoon of Bernstein forecasts a 25% upside for Disney, positioning it as the sole credible contender to Netflix in the streaming market. He states, ‘We anticipate that Disney’s direct-to-consumer (DTC) segment will surpass its linear business by 2024.’
Bernstein's Laurent Yoon sees an upside of 25% for Disney, saying it's the only credible competition for Netflix in the streaming space: "We expect (its) DTC to outgrow Linear by 2024."$DIS $NFLX pic.twitter.com/FSf1kVPbgz
— The Exchange (@CNBCTheExchange) October 9, 2023In his March 2025 report, Yoon examines the risks facing Netflix. Europe, which had 101 million subscribers in 2024, is a crucial market for the company. Potential tariff increases could raise subscription costs in major markets like Germany and the U.K., where Netflix currently leads in Subscription Video on Demand (SVOD). This situation could lead to subscriber churn and slow down subscriber growth.
Netflix, Disney+… Vers une hausse des abonnements en réponse aux droits de douane?https://t.co/NPtTkhbrGs pic.twitter.com/FfIBbQvpiC
— BFMTV (@BFMTV) April 3, 2025Can Netflix Dodge the Blow?
Yoon observes a defence as Netflix invests millions into local European content and jobs, strengthening the region’s media landscape. He doubts that governments would impose significant tariffs on the company. However, Yoon argues that if costs increase for users, the consumers—rather than Netflix will feel the impact the most.
Read: Trump Sets 29% Tariff on Pakistani Goods
Tariffs could crimp Netflix’s European expansion. Higher churn and stalled price hikes might shrink Average Revenue per Member (ARM). Yoon’s worst-case scenario? A 10% hit to 2026 earnings per share. Yet, he predicts a milder mid-to-high single-digit dip, given Netflix’s SVOD dominance.
With its April 2025 earnings approaching, Netflix’s pricing strategy will be scrutinised. Will it endure this challenge or encounter a slowdown in Europe? The stakes are significant.
