Prediction: Netflix Will Double in Value
The way the headlines read, you would think Netflix’s (NASDAQ: NFLX) days are numbered. Here’s a quick sampling…
The Wrap writes: “Netflix Has Lost $17 Billion in Value in the Last 24 Hours.”
The Verge states: “Netflix Is Losing Beloved Shows, Subscribers and Confidence.”
MarketWatch claims: “Netflix CEO Reed Hastings May Have Missed the Reasons Why U.S. Subscribers Numbers Plunged.”
It goes on and on like this across major media outlets. And the herd, of course, are running like lemmings off a cliff to dump their NFLX shares, which over the past two days have sunk over 12%.
Here’s why that’s a BIG mistake.
Content Is King
Netflix years ago carved out a brand-new landscape for digital media.
Since its pivot from DVD delivery service to online streaming, Netflix has been off and running for shareholders. Look at the 10-year chart:
But Netflix knew one day it would become one of the many available streaming services.
Which is why Netflix is already secretly pivoting again. And NBCUniversal and Disney (which now owns Fox and Hulu) should watch out.
When the dust settles from the streaming wars, Netflix will still be king. But they won’t be a streaming company anymore.
They will be a studio company with the best streaming service around.
Because content is king.
I love The Office like most folks, but I didn’t lose any sleep when NBC pulled it from Netflix. I rested easy after watching a few episodes of Stranger Things and knowing NBC had to shell out $500 million to buy back content they used to own.
And NBC isn’t the only company shelling out big money to take back content some people stream in the background while they clean the house or pay bills.
Meanwhile, the real numbers show folks are gobbling up Netflix original content:
Earlier this month, the New York Post noted: “Dead to Me Pulled in 30 Million Viewers on Netflix.”
Additionally, Slate reported: “105 Million Subscribers Have Watched an Episode of Orange Is the New Black.”
Stranger Things 3 has 40 million viewers since July 4, as reported by TVLine.com.
How are the big networks, which are vying desperately to battle Netflix’s influence, faring in comparison? Well, not too great.
CBS’ top-rated Big Bang Theory pulls in an average of 12.7 million viewers.
ABC’s Grey’s Anatomy clocks in with an average of 8.13 million viewers. NBC and Fox’s top-rated shows, Sunday Night Football (NBC) and Thursday Night Football (Fox) averaged 19.7 million and 14.3 million viewers, respectively.
Netflix is obviously the people’s choice.
From Streaming Wars to Studio Wars
As I outlined above, Netflix will win the streaming wars thanks to fantastic original content that keeps folks watching — and, despite softer numbers this quarter, subscribing.
But Netflix is secretly pivoting into a major studio producer and is opening film studios all over the globe as we speak.
This means more original content tailored to specific markets, which represents a significant edge against its competitors.
Netflix bought its first production studio back in 2018 in Albuquerque, New Mexico. Since then, it has announced new studio plans in Brooklyn, New York, London, Toronto, India and Madrid, with many more to come.
Masters of content with the resources to take on the biggest Hollywood studios (not to mention sign A-list talent whenever they want), Netflix has the recipe for unrivaled success moving forward in the new media landscape.
Netflix is well on the way to becoming a perfect vertically integrated media company.
In another 10 years, the folks who own NFLX today will be swimming in riches thanks to this incredibly innovative company.
The only thing you should fear about Netflix is missing out on the coming gains.
For Technology Profits Daily,
Chief Technology Expert, Technology Profits Daily