Dec 28, 2019 - Technology

The stock of the decade: Netflix

Orion Rummler

Illustration: Sarah Grillo/Axios Visuals

Netflix's 4,181% return from 2010 to the present makes it the S&P 500's best performer of the decade, CNBC reports.

The big picture: Netflix was the catalyst for the now-ubiquitous streaming wars that have overloaded dozens of major platforms with live and on-demand video.

Where it stands: Netflix's current market cap — nearly $148 billion — makes it one of the 40 most valuable companies in the U.S., per CNBC.

  • Netflix’s member base rose to 158.3 million at the end of 2019's Q3, CNBC reports, with international growth as the primary driver.
  • Subscribers from outside the U.S. now account for 62% of all Netflix members.

Yes, but: Netflix faces emboldened competitors loaded with cash, like Disney+ and Apple TV, and the streaming giant may have to spend more on content to retain customers and subscriptions. More competitors also mean more platforms are vying for the same top talent.

Go deeper: The streaming battlefield is getting crowded

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Netflix may have gone viral with a humorous tweet about password sharing this week, but Wall Street sees the practice as a drag on the company and its rivals to the tune of billions of dollars in revenue each year.

Why it matters: With competition growing and the cost of content continuing to increase, some streaming companies are likely to consider cracking down on the widespread practice.

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Netflix stock down slightly after missing domestic subscriber estimates

Photo: Jaap Arriens/NurPhoto via Getty Images

Netflix's stock was down slightly in after-hours trading on Tuesday after it missed investor expectations for domestic user growth, a sign that increased competition from Disney and Apple may be impacting its growth in North America.

Yes, but: The company still posted strong overall subscriber growth, beating analyst estimates by over 1 million subscribers internationally. It also surpassed expectations for revenue and earnings per share, an impressive feat for a company that is facing massive debt.

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On-demand video rental services get awards season boost

Data: PwC and Digital TV Research; Chart: Axios Visuals

Over the last decade, transactional video on-demand (TVOD), which are services that sell or rent content on a one-time basis, have largely been challenged by the rise of subscription and advertising-based streaming services that allow users to access hundreds of titles for a monthly or yearly fee.

Case-in-point: Companies like Apple and Amazon, which still sell and rent content to users, have both invested heavily over the past year in building up their own subscription streaming platforms (SVODs).

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