Netflix: Is Anybody Still Watching? – Kaitlyn Hart
Netflix, inc. is blasting right past every other streaming service in terms of their financial well-being.
Over the past year, they have earned close to half a million dollars more in their revenue towards their streaming content, according to the company’s quarterly report, but the company has also suffered major low hits in their stock lately, especially in late December 2018 which is their record low, according to CNN. This being said, Netflix is still the number one streaming service in the game, according to Marketrealist.com.
“We compete so broadly with all of these providers that any one provider entering only makes a difference on the margin,” said Netflix CEO Reed Hastings, to Business Insider. “I really think our best way to win more time is by having the best experiences in all the things that we do.”
Lately, Netflix has been in the news for the controversial shift in their business model. According to Fox Business, instead of releasing an entire season or series of a show all at once so consumers will be able to binge-watch’ to their heart’s desire, Netflix has decided to try and take a page from Hulu’s game book, and release one episode a week for their upcoming hip-hop reality competition show, “Rhythm + Flow”.
On why Netflix is only trying this out with one of their shows, industry expert and analyst Dan Rayburn has an idea on what the company could be planning.
“Netflix knows what’s best for their business,” says Rayburn. “They have a responsibility to shareholders and consumers alike so that the business can survive. If the binge-watching model did that much damage to their bottom line, they would change it.”
According to the company’s 10-Q, Netflix has lost almost $114,000 in net income over the period of June 2018 to June 2019. This is due to their rising subscription costs, which rose from $9.00 a month to $14.00 a month over the span of just a few years.
In terms of Netflix’s revenues and operating profits, they are increasing rapidly. From June 2018, to June 2019, their operating income increased by almost $463,000. This being said, it is obvious that Netflix has not been majorly impacted by their rise in subscription cost in terms of their operating profits.
As of July 2019, stock shares were $384 per share, until an unexpected drop in stock decreased the value to a jaw-dropping $291 in September of 2019. Over a one year period, Netflix inc., has hit a low stock price of $231.23 per share, and a high stock price of $386.80.
In the future, it is possible that Netflix will have to consider dropping their subscription prices if they want to compete with their competitors that are developing new platforms that Netflix has not yet reached in terms of technology, such as Hulu Live. Both Hulu and Sling are online streaming platforms that have also expanded to streaming live, local television as well as their normal streaming content such as sitcoms and movies.
When thinking about the future of the company, Reed Hastings is hopeful.
“We’re expanding into unscripted content; we’re expanding into lots of local content. Like “The Witcher” or “1983.”,” Hastings told Business Insider. “We’re doing more around the world. We’re making a ton of content in Japan, South Korea, India, and all throughout Europe. We’ve got big efforts ahead.”