Netflix, Inc. (NASDAQ:NFLX) is currently one of the most successful and influential companies in the world. It has been at the helm of the content streaming movement and currently boasts of a global audience and this is not only advantageous from a revenue point of view but also in terms of competitive edge.
Netflix currently has the biggest piece of the pie in the content streaming market and this is due to a combination of factors. The company had an early start compared to most of its current rivals. Its cord-cutting service and content variety made it quite an appealing option that was well-timed to attract the millennial generation. Additionally, the fact that it decided to start making its own original content proved to be one of the best decisions that its executives made with their sight set on more growth in the future.
The move towards more original content has helped to maintain a strong user base, to attract more growth and also to stay ahead of the competition. Netflix has for the past one year demonstrated significant growth in terms of share performance. The price of the stock was sub-$150 in April of 2017 but has been gradually gaining ever since with the price managing an all-time high of above $330 in March this year.
The growth in the value of the stock aligns with the growth that the company has been reporting in its user base. Earlier this year, Netflix reported that it gained a total of 8.3 million new subscribers within the fourth quarter of 2017 alone and this was more than the projected 6.4 million. This growth had also been backed by aggressive marketing campaigns as well as content. Data provided by Investopedia revealed that the company had a net income of $588 million in 2017 and a net revenue of $11.7 billion in the same year. This means the company had impressive improvement compared to the previous year in which it had a net income of $186 million and a net revenue of $8.8 billion. The income and revenue figures highlight massive spending as a result of the company’s expenses.
Netflix might be miles ahead of the competition in terms of revenue and taking over TV the attention of viewers. However, it has been facing heavy competition from other streaming companies such as Amazon.com, Inc. (NASDAQ:AMZN), Hulu which is currently owned by Walt Disney Co (NYSE:DIS), Facebook, Inc. (NASDAQ:FB) and Alphabet Inc (NASDAQ:GOOGL) with its YouTube video streaming platform. These are just some of the numerous rivals that are in the streaming market.
It is also worth noting that Disney is planning on launching its own content streaming platform in 2019. Services such as Amazon Prime and Hulu are also growing rapidly thus posing a bigger threat to Netflix. Additionally, more cable companies are jumping on board the streaming train to adapt to the cord-cutting trend. This means the number of streaming options for cord cutters is increasing and this means Netflix might end up having a smaller share over time and this might affect its performance.