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Katherine Ross: The streaming wars are just getting started. And Netflix is reporting its final earnings report before Disney Plus goes live after the bell today. Chris Versace, Real Money contributor and Portfolio manager for Trifecta Stocks, which owns Disney and TheStreet's Tech stocks editor, Nelson Wang, join me to break down whether or not this will be an occasion to Netflix and chill, or if now is the time to panic. Nelson, do you expect to see an impact from Disney Plus in Netflix's forecast?

Nelson Wang: I think it's possible that Netflix addresses the impact of Disney's launching a Disney plus TV Plus, in the third quarter. But I think it's a little bit premature. It's gonna take some time for it to ramp up. So the impact of it will probably not be felt for a little while. I think they'll probably address it in a qualitative way and say, you know, as Reed Hastings noted a couple of months ago that it's gonna be a whole new world when Disney and Apple and all these other competitors enter into the market. But I think it's gonna be a little bit premature now for them to address it in their actual forecast numbers.

Katherine Ross: Chris, I know that you're an investor in Disney, but how should investors trade Netflix going into earnings?

Chris Versace: Well, I think there's going to be a couple of things to look for. First one is do they hit the aggressive forecast that they've put out there for the September quarter? You know, they're looking for like you know, 33% international growth on the streaming membership side. That's a big number. They're also looking for about 700 basis points of improvement on the contribution margin for that business. So very, very big targets that they need to hit. The other thing I think we need to understand is what are they going to be doing going forward in terms of spending, particularly on proprietary content. You know, you alluded to Apple, you alluded to Disney Plus, there's AT & T with HBO max coming along, and I think that is going to force a arms race in terms of content and we need to understand what that means for Netflix in terms of spending cashflow and their balance sheet.

Katherine Ross: I personally would be curious to hear what Reed Hastings has to say about the streaming wars now as opposed to last quarter. Thanks for joining Nelson and Chris and for all the latest news, head on over to the street.com.

Time to Netflix (NFLX - Get Report) and chill?

Let's take a look at the company as it prepares to report earnings after the bell Wednesday, Oct. 16. 

FactSet says that analysts expect Netflix to report Q3 revenue of $5.25 billion and GAAP EPS of $1.03. 

But the real stock mover for Netflix are the subscriber numbers

According to TheStreet's tech columnist, Eric Jhonsa, "Netflix guided in its Q2 report for 7 million Q3 paid streaming subscriber adds -- 6.2 million in international markets and 800,000 in the U.S. For seasonally big Q4, the consensus is for 8.04 million international and 1.44 million U.S. paid streaming adds."

Chris Versace, Real Money contributor and portfolio manager for Trifecta Stocks--which owns Disney (DIS - Get Report) --and Nelson Wang, tech stocks editor at TheStreet, discussed Netflix as the company prepares to report its final earnings report before the streaming wars really heat up and Disney+ goes live.

"I think it's possible that Netflix addresses the impact of Disney's launching a Disney+...in the third quarter. But I think it's a little bit premature. It's gonna take some time for it to ramp up. So the impact of it will probably not be felt for a little while. I think they'll probably address it in a qualitative way and say, you know, as [Netflix CEO] Reed Hastings noted a couple of months ago that it's gonna be a whole new world when Disney and Apple and all these other competitors enter into the market. But I think it's gonna be a little bit premature now for them to address it in their actual forecast numbers," said Wang. 

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