If you had invested $1 million (€900,000) in Netflix on January 1, 2010, you would have $43 million (€39 million) today. According to
CNBC ‘s annual report , over the past ten years, Netflix’s return was
4,181% and its index rose by 189%. This was the
best return of the decade .
Netflix: the company of the decade?
In comparison, since its IPO, Apple’s stock return has increased by 9,149%, while Facebook’s stock return has reached “only” 298%. When Netflix had only 12 million paying subscribers in 2010 , its market share was nowhere near what it is today.
Yet, in 2019,
Netflix was considered the 5th
most-watched
channel in France , with
13 million users (160 million worldwide). Subscription video-on-demand is the media of the future, and Netflix dominates the market despite increasingly fierce competition. The company now has a
market capitalization of nearly $148 billion (€133 billion), placing it among the 40 largest American companies.
Caution: this image of good health may be merely superficial, according to some specialists. This is particularly true of Michael Pachter of Wedbush Securities . A lifelong Netflix subscriber, he describes the company’s stock market valuation as “unjustified” and warns shareholders and customers of the streaming service about “the continued erosion of cash flow over the past decade” and the “migration of content to competing services.” The threats are real for Netflix, which is constantly striving to innovate to stay ahead of the competition . Investments in original content are very expensive, preventing the company from generating substantial profits.
The content war is raging
Indeed, experts believe a real battle for content is currently underway . The arrival of Disney+, WarnerMedia’s announcement of HBO Max’s launch for May 2020, and the debut of Apple TV+ in November have all hurt Netflix. As part of its strategy, Netflix is choosing to invest even more in creating original content and continue to differentiate itself in this way, despite the loss of very popular shows.
Among Netflix’s latest original productions in 2019 were Martin Scorsese’s The Irishman , Noah Baumbach’s Marriage Story , and Eddie Murphy’s Dolemite Is My Name . That year, the company’s work was even recognized with a Golden Globe nomination, and the hit series Ozark , The Crown , The Kominsky Method , and House of Cards propelled the company to numerous Emmy Award nominations . Netflix believes it has the formula to make a difference again in the next decade.
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