Netflix

One sentence overview: Netflix is video streaming service which eliminated the need to go to a video store and paying late fees.

Netflix Ticker : NFLX

May 22 Stock Price: $429.32

May 22 Market Cap: $188B

Total Shares Outstanding Recent Quarterly Report: 439.8 million shares

 Netflix Investor Relations Page

https://www.netflixinvestor.com/ir-overview/profile/default.aspx

Netflix SEC Page

https://www.sec.gov/cgi-bin/browse-edgar?CIK=nflx&Find=Search&owner=exclude&action=getcompany

Netflix Glassdoor Ratings

https://www.glassdoor.com/Reviews/Netflix-Reviews-E11891.htm

Netflix Overview

Netflix is the world’s leading streaming entertainment service with 183 million paid memberships in over 190 countries enjoying TV series, documentaries and feature films across a wide variety of genres and languages. Members can watch as much as they want, anytime, anywhere, on any internet-connected screen. Members can play, pause and resume watching, all without commercials or commitments.

History

Netflix, Inc. (/ˈnɛtflɪks/) is an American media-services provider and production company headquartered in Los Gatos, California, founded in 1997 by Reed Hastings and Marc Randolph in Scotts Valley, California. The company’s primary business is its subscription-based streaming service which offers online streaming of a library of films and television programs, including those produced in-house.It is available worldwide except in the following: Mainland China (Due to local restrictions), Iran, Syria, North Korea, and Crimea The company also has offices in Brazil, Netherlands, India, Japan and South Korea. Netflix is a member of the Motion Picture Association (MPA). Today, the company produces and distributes content from countries all over the globe.

Netflix’s initial business model included DVD sales and rental by mail, but Hastings abandoned the sales about a year after the company’s founding to focus on the initial DVD rental business. Netflix expanded its business in 2007 with the introduction of streaming media while retaining the DVD and Blu-ray rental business. The company expanded internationally in 2010 with streaming available in Canada, followed by Latin America and the Caribbean. Netflix entered the content-production industry in 2013, debuting its first series House of Cards.

Since 2012, Netflix has taken more of an active role as producer and distributor for both film and television series, and to that end, it offers a variety of “Netflix Original” content through its online library. By January 2016, Netflix services operated in more than 190 countries. Netflix released an estimated 126 original series and films in 2016, more than any other network or cable channel. Their efforts to produce new content, secure the rights for additional content, and diversify through 190 countries have resulted in the company racking up billions in debt: $21.9 billion as of September 2017, up from $16.8 billion from the previous year. $6.5 billion of this is long-term debt, while the remaining is in long-term obligations. In October 2018, Netflix announced it would raise another $2 billion in debt to help fund new content.

Business and Financial Drivers

Competition

The top streaming services are: Netflix, HBO GO, HBO NOW, Disney Plus, Hulu, Amazon, Prime Video, Sling TV, Fubo TV, Crackle

Future Outlook

The world’s leading linear TV networks now offer their programming on-demand through apps that run on phones and smart TVs. These apps, such as Disney+, CBS All Access, BBC iPlayer, and HBO Now, enable binge viewing and catch-up viewing. Existing linear networks that offer compelling internet apps will generate more viewing and become more valuable. Those networks that fail to develop first-class apps will lose viewing and revenue.

Streaming entertainment is expanding rapidly because of:

⦁ Ecosystem Growth: The internet is getting faster and more reliable, while penetration of connected devices, like smart TVs and smart phones is also rising Freedom and
⦁ Flexibility: Consumers can watch content on demand, on any screen, and the experience is personalized to individual tastes
⦁ Rapid Innovation: streaming entertainment apps have frequent improvement updates and streaming is the primary source of UHD 4K video content.

Eventually, as linear TV viewing falls in viewing and value, the spectrum it now uses on cable, fiber, and over-the-air will be reallocated to expand internet data transmission. Satellite TV subscribers will be fewer and more rural. In a few decades, linear TV will be the fixed-line telephone: no longer mainstream.

Risks

Slowing U.S. subscriber growth and competition from Disney+ put pressure on Netflix pricing.

Netflix says it will expand its low-priced mobile streaming service — already available in India, Indonesia and Malaysia — to more markets but not in the U.S., where it sees no compelling reason to lower prices.

Netflix does not budge on adding a lower-priced, ad-supported plan for U.S. subscribers in the range of $5–$7, it could lose 4 million subscribers in 2020.

Disclaimer: I do not have any formal recommendation for or against this stock, so don’t buy or sell stocks based solely on what you read.

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