The broader U.S. stock market may be rebounding, but shares of Netflix remained in the red Wednesday, adding to an overall stock drop of more than 13% this week for the popular video streaming service.
Shares were briefly down as much as 8% during Wednesday trading. Since the beginning of the week, the selloff has knocked about $6.6 billion off of Netflix’s (NFLX) market cap, and its decline clearly has to do with more than just market volatility.
Shares started to dip Monday after the company said it would not renew an agreement with cable network Epix, which means a long list of popular movies, including The Hunger Games, will disappear from the site at the end of this month. Rival Hulu also announced this past weekend that it signed on with Epix to bring those same movies to its own streaming service. And as if that wasn’t enough, Hulu — which is owned by Walt Disney Co. (DIS), 21st Century Fox (FOX), and Comcast’s (CMCSA) NBCUniversal — took another swipe at its larger rival on Wednesday with the announcement that it will start offering a commercial-free version of its Hulu Plus premium streaming service, a service that will soon include a bolstered roster of movies, thanks to the Epix deal, in addition to Hulu’s wide range of original and network television programming.
Netflix shares endured earlier swings in August, including a nearly 30-point (22%) drop over the course of one week as the company suffered from the broader media swoon that drove down stock prices of several traditional media competitors including Disney, Fox, Time Warner (TWX), CBS (CBS), Discovery Communications (DISCA), and Viacom (VIA). The sector drop followed disappointing quarterly results and a skeptical analyst report stoking uncertainty over the future of the television industry.
Netflix’s recent stock market struggles may not be cause for alarm just yet. Shares have still more than doubled in value year to date, and as Fortune’s Matthew Ingram pointed out earlier this week, losing the Epix deal is not a huge blow, because that network’s movies are also available for streaming from competitor Amazon (AMZN). Netflix prefers to rely more heavily on exclusive content, either through an outside agreement or with its own original TV shows and films. In fact, the company has an exclusive pact with Disney — including the right to run new movies months after their theatrical release — that begins next year.
