How Rich Would You Be Today Had You Invested $1000 in Netflix in 2007?
Streaming platforms have recently gained a lot of traction, with the demand for online content being ever on the rise. Netflix seems to be the default leader of the pack, with the online community coining up such phrases as “Netflix and chill”, meaning hanging out with someone while streaming something.
The phrase is still used even when the streaming service to be used isn’t Netflix. Talk of creating an undeniable niche! No wonder analysts are looking forward to seeing how Disney’s Disney+ will compete with Netflix. Will it poach its customers? Will it flop, given Disney’s history in digital platforms? We are yet to find out.
With competition being stiff in the market, we’ve all got our eyes on Netflix, whose stock fell over 1% last week. Still, investing in the network would be a very smart financial decision, as those who did so when Netflix first started out know now.
The streaming platform came into being in early 2007. Had you acquired a $1,000 stake mid-January that year, your investment would have been worth $110,000 and then some by 16th April this year, going by calculations by CNBC. That’s about 10,000% in profits!! What a return! And this is considering that in the same time frame, the S&P 500 peaked at a little over 100%.
Despite the slight drop in stocks last week, the network had its quarterly revenue to smile about, seeing as it surpassed all estimates. And as you and I can guess, the shares are already up by now – and by 34% at that.
Concerning new competition, analysts, particularly from KeyBank, doubt whether the introduction of other platforms in the market will pose a significant threat to Netflix. According to them, the platform’s position is beyond safe. Are they that good businesswise? Because in the entertainment world you bet they are!
Deutsche Bank plans to invest more in Netflix, and has secured plans to buy more shares in the network. According to Bryan Kraft, an analyst at the bank, Netflix is all but a magnet, attracting different content and all manner of talent. Consequently, consumers view it as the first destination when looking for something to watch, making it part of society’s culture.
This way, people spend hours on end streaming their products, seemingly being “held captive” by the platform. All of this culminates to significant profits, ones that put Netflix well ahead of its competitors.
As of February this year, the streaming service boasted of 148 million subscribers, and the prediction is that the number will rise to 335 million in a decade.
Disney+, on the other hand, hopes to have reached at least 60 million subscribers by 2024, after it is launched in November this year. Will Netflix ever be within reach?
And although many are way over the moon concerning Netflix’s market share, Carter Worth, another analyst insists that the service should tread lightly.
That their shares dropped soon after Disney announced they would introduce a similar streaming platform is telling, according to Worth. The fact that Disney+ will also be cheaper should be a cause for worry. But let’s see how all this unfolds.
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