Streaming platforms have gained much traction, with demand for online content continuing to rise, especially after the social distancing and lockdown during the pandemic. Netflix is by default, the leader of the pack, with online communities coming up with phrases like “Netflix and Chill”, which means hanging out with someone while streaming.
Many consumers have subscribed to Netflix since its launch in 2007 with the phrase used even when the streaming service used isn’t Netflix. It has created an undeniable niche and analysts await when Disney+ will compete with Netflix and possibly poach its customers? Given Disney’s history in digital platform, will it flop? We await the roll-out.
With competition being stiff in the market, the eagle eyes of investors have watched Netflix stock fall over 1% recently. However, investing in the Netflix network will be a very smart financial decision, as those investors who invested in Netflix which first started out in 2007, know now.
The streaming platform started in the beginning of 2007 and Netflix went public in May of 2007, with an IPO (Initial Public Offering) price of just $15 per share. From 2010 to 2019, Netflix remained the best-performing stock in the S&P 500. If you had purchased $990 of Netflix stock during its prevailing original IPO price back in 2002 and retained the stocks through its two stock splits, then you would have owned 924 stock shares valued at $340,956, as on Feb. 4, 2020. Your Return on Investment would be 34,340% over almost 18 years.
Concerning competition, analysts doubt whether other platforms will pose a threat to Netflix as their platform’s rank is no that safe but remains good businesswise in the entertainment industry. Deutsche Bank is investing more in the Netflix network. Netflix is a magnet, collecting different kinds of content and all kinds of talent and consumers view it as the main destination when looking for something to watch. It’s about Netflix vs. the world of content providers. Netflix is the biggest paid streaming service in the globe, with around 150 million subscribers, and first started as a content distributor, but major content providers realized there was money to be made and wanted in on the game. Netflix remains a data-steered technology company, developing sophisticated computer analytics and algorithms to assist consumers decide what to watch, figure out what content to develop and produce and distribute original material. They don’t intend to compete with major content companies like Warner, Disney and other media companies which continue to develop movies and TV series in the traditional studio style.
Today, people spend hours on end-streaming their products, seemingly held captive by the platform. This culminates to significant profits, putting Netflix ahead of all competitors. Beyonce recently released a Netflix documentary called Homecoming. By end-February 2020, it had 148 million subscribers and predicts 335 million subscribers by 2030. Disney+ expects to reach about 60 million subscribers by 2024, if launched by November 2020. Will Netflix remain within reach? Though investors rave about Netflix’s market share, analysts insist that they should tread lightly as their shares soon started dropping after Disney announced their introducing their own streaming platform. Further, Disney+ will be cheaper and should be cause for worry, depending on the narrative unfolds.