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Academy Center > Statistics
English Markets Specialist at Investing.com (SEO)
BA (Hons) Business (1st) University of Coventry, England
“Netflix” is a household name. For many, watching a movie or TV show has become synonymous with watching Netflix.
During the pandemic, the company almost had a therapeutic or at least a calming effect on viewers. Stuck at home, people entertained themselves by binge-watching films and shows on Netflix, which made their enforced seclusion more bearable. Even those who were not TV addicts under normal circumstances signed up for the streaming platform, pushing its number of subscribers ever upward during the global lockdown.
When, after the pandemic, people began to cancel their subscriptions, Netflix resolved to reel them back in by producing more original programming than any company in the modern Hollywood industry. Netflix releases more than 700 titles a year. It produces more films, animation, documentaries, reality TV, scripted TV, and stand-up comedy than anyone else in the industry.
Despite continued streaming wars, Netflix is not easily cowed by its competitors, bravely fighting for retaining the leading position in streaming services.
To understand whether Netflix offers valuable investment opportunities this year, continue reading. The sections below contain enlightening historical and statistical information that might influence your decision to invest.
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Annual revenue is the total amount of money a company earns from business operations in a year before any deductions for returns, the cost of goods it sold, and expenses.
Netflix’s annual revenue for 2023 was $33.72 billion, which constituted a growth of 6.7% from the previous year. Its annual revenue for 2022 amounted to $31.61 billion, a similar 6.5% increase from 2021. Netflix’s highest quarterly revenue was in the fourth quarter of 2023, reaching $8.83 billion. As Netflix has approximately 13,000 full time employees, the revenue-per-employee ratio is $2,593,846.. The upward trajectory of the company’s annual revenue over the years is reflected in the table below:
Netflix reported its 2023 fourth-quarter earnings on January 23, 2024, with an EPS of $2.15. Revenue for the quarter came in at $8.83 billion, rising by 12.5% on a year-on-year (YoY) basis versus the previous year’s revenue of $7.85 billion.
We enter 2024 with good momentum. We expect healthy double digit revenue growth for the full year 2024 on a F/X neutral basis driven by continued membership growth as well as improvement in F/X neutral ARM as we adjust prices. We’ll also continue to invest in and build our ads business; we expect strong growth in 2024 but off a small base so it’s not yet a primary driver of our overall revenue growth. Our aim is to make ads a more substantial revenue stream that contributes to sustained, healthy revenue growth in 2025 and beyond,” said the company in a letter to its shareholders.
Netflix reported its 2023 third-quarter earnings on Wednesday, October 18, 2023, with an EPS of $3.73, $0.24 better than the analyst estimate of $3.49. Revenue for the quarter came in at $8.54B versus the consensus estimate of $8.54 billion.
Netflix’s global average monthly revenue per paying user (ARPU) is $16.64. Since 2017, there has been a sharp growth of 76.45%.
Below is the table showing Netflix’s average monthly revenue per membership from 2017:
Annual revenue growth refers to an increase in revenue over a year. It is the rate of increase in total revenues divided by total revenues from the same period in the previous year. Revenue growth can be measured as a percent increase from a starting point.
The table below shows Netflix’s annual revenue growth from 2009 to 2023:
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A company’s net income is defined as its net profit or loss after all revenues, income items, and expenses have been taken into account.
Netflix’s net income for the quarter ending on December 31, 2023, was $937.8 million, constituting a stellar growth of almost 1,600% year-over-year. Netflix’s net income for the twelve months ending December 31, 2023, was $5.408 billion, a 20.4% jump on a year-over-year (YoY) basis. Netflix’s annual net income for 2022 was $4.492B, which is a 12.2% drop from 2021.
How much Netflix earned in other years can be seen in the following table:
Earnings per share (EPS) are defined as a company’s net earnings or losses attributable to common shareholders per diluted share base, which includes all convertible securities and debt, options, and warrants.
Netflix’s diluted EPS for the quarter ending December 31, 2023, was $2.11, which constitutes a breathtaking jump of over 1,650% year-over-year. Netflix’s 2023 annual EPS was $12.03, pointing to a 20.9% jump from the figure in 2022. Netflix’s 2022 annual EPS was $9.95, which amounts to a 11.5% fall from 2021. Their 2021 annual EPS was $11.24, a whopping 84.86% increase from 2020.
For the historical changes in the company’s earnings per share, consult the table below:
A company’s operating income is defined as income after operating expenses have been deducted and before interest payments and taxes have been deducted.
Netflix’s operating income for the quarter ending December 31, 2023, was $1.244 billion versus $154.6 million in the same period last year. Netflix’s annual operating income for 2023 was $6.661 billion, a 12.6% rise from 2022. Netflix’s annual operating income for 2022 was $5.633 billion, a 9.07% drop from 2021. Its annual operating income for 2021 was $6.195 billion, amounting to a healthy 35.1% uptick from 2020.
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As viewers gladly watch Netflix’s original content, the company invests in it large amounts of money to provide a diverse range of series.
Netflix spent $13 billion on original shows in 2023. This is a decrease from the previous year when Netflix invested $16.84 billion in content. The company plans to increase its spending on content to almost $17 billion in 2024. Consult the table below to see how much Netflix has invested in original content over the years:
The table below presents the most popular Netflix original movies, whose popularity is measured by the hours spent watching them globally in the first twenty-eight days of release:
Since the year of the company’s inception, Netflix co-founder Reed Hastings has been focused solely and exclusively on how to lure more subscribers to its streaming services. He brushed away advice to introduce advertising, embrace movie theaters, or purchase a rival studio.
Netflix put all its resources into creating original programming for the internet. The company’s single-minded focus on original content designed to increase subscribers paid off: Netflix is considered by far the most popular TV network in the world.
What has negatively influenced the number of Netflix subscribers is the price of its streaming services. In April, May, and June of 2023 Netflix added 5.9 million new subscribers. This is almost three times as many as analysts expected after Netflix clamped down on households that were password sharing.
The table below contains changing numbers of the company’s subscribers worldwide:
Netflix has been facing cutthroat competition from other companies streaming content online, though it still retains the leading position – 44.21% of the market share at the beginning of 2023.
Warner Bros. Discovery, Paramount Global, and NBCUniversal use their profits from cable networks to improve streaming services that collectively lose billions of dollars a year. But as they offer cheaper packages, many customers defect to them from Netflix. Netflix’s goal should be to prevent the defection of its customers to its rivals.
There are also newer competitors such HBOMax and PeacockTV that pose a threat to Netflix. Both continue to grow in 2023, with market shares of 10.31% and 8.08%, respectively. It seems that these relatively newer entrants to the market are successfully gaining traction and attracting subscribers.
Hulu has also increased its market share by 3.37% year over year, boasting 21.18% in the first quarter of 2023.
As Netflix’s market share declined by 5.56% year over year in the same quarter, it should start considering Hulu as a force that should be reckoned with in the market. In terms of subscribers, the arch-competitor of Netflix is Amazon Prime, as the table below demonstrates:
The penetration rate is the percentage of the relevant total population that has purchased a Netflix subscription at least once.
Netflix has the highest penetration rate in Australia – 65%. The United Kingdom and the United States follow with a penetration rate of 57% and 53% respectively. Although Netflix’s largest market is the United States, it enjoys only the third position in terms of penetration.
Consult the table below to see how other countries are devoted to Netflix:
Netflix can be watched from all corners of the world. Yet its products are not distributed equally across the globe, though the company does not discriminate out of spite. The problem is that each country has a different set of laws that apply to licensing of content. When Netflix selects content, it does this in keeping with the laws of the particular country where it intends to stream its movies and shows. In other words, it is not Netflix but rather the countries that set up restrictions on the content their people watch. Netflix can do nothing but respect the licensing laws of its customers. This results in an uneven distribution of shows and movies.
In 2023, Netflix’s largest library is presently in Slovakia, counting 8,427 titles. Bulgaria comes second, with 8,272 titles. The table below shows how unevenly Netflix’s content is delivered to different countries:
“Netflix” is a portmanteau word, made of two words – “net,” short for “network” – and “flix,” which is a plural form of a slang term for “movies.”
This word was coined in August 1997, when Marc Randolph and Reed Hastings launched their company in Scotts Valley, California, as online movie rentals.
Greg Peters and Ted Sarandos are the co-CEOs of Netflix, with Reed Hastings as the Founder and Executive Chairman of the company.
Before co-founding Netflix, Reed Hastings started a company called Pure Software, which brought him his first fortune. His experience at Pure Software inspired Hastings to prioritize simplicity in his management of Netflix.
For over 25 years, the founders of the company were almost single-mindedly focused on one goal: inviting more subscribers to its streaming services.
Hastings’s unwillingness to air movies in theaters, buy a rival studio, or test a concept for a movie rental kiosk caused disagreements between him and Randolph, and the latter stepped down as the company’s CEO and turned to product development.
Randolph left in 2002 after helping guide it through its initial public offering two years earlier. In 2023, Hastings stepped down as CEO, becoming the company’s Executive Chairman.
Netflix’s leadership team is full of star executives. Ted Sarandos, a co-CEO, oversees the company’s content budget; chief product officer and an incumbent co-CEO, Greg Peters, manages the platform. Scott Stuber, a movie boss, is responsible for making Netflix a major player in Hollywood. There are also Melissa Cobb, who helps Netflix compete with Disney+, and Todd Yellin, product vice president, under whose supervision Netflix entertainment evolves. These and the other 12,800 employees cooperate to increase Netflix’s revenue and market cap, which is estimated at $189,277 billion, as of the end of July 2023.
With a current stock price of over $609, Netflix (NFLX) has come a long way since May 2002, when it had its initial public offering (IPO) and sold 5.5 million shares of common stock at the price of only $15.00 per share, bringing in $1.5 million then. Now, the company’s logo, the red letter “N”, is easily identifiable not only at the NASDAQ, where it trades, but across the world.
On its website, Netflix writes that it is proud to own a letter of the alphabet and that, to emphasize its ownership, the letter “N” should always appear in its signature color.
Despite positive prognosis, these are not the best times for Netflix (NFLX). 2022/2023 were challenging, with subscribers opting out of Netflix services at an unprecedented rate.
In the second quarter of 2022 alone, the company bid goodbye to 970,000 subscribers. This immediately prompted a sell-off of its shares. And although Netflix eventually recovered some of its subscription losses, its business didn’t experience desired growth in 2023.
About one-fifth of all new clients in the US are calling off their subscriptions after just one month. The rate at which Netflix’s long-term customers are unsubscribing has also started to edge up. Even though the platform offers better entertainment than other media companies, its services are no longer unique and indispensable. Netflix has also increased its prices. Though it used to be a cheaper alternative to cable, now it is more expensive than other streaming services. To bear the heat of the competition, Netflix should make some changes in its business this year.
A: Netflix’s competitors include Amazon Prime Video, Hulu, Disney+, YouTube TV, HBO Now / HBO Go, Sling TV, Crunchyroll, Apple TV+, Twitch, Crackle, Warner Media, Fox, NBCUniversal, and Paramount+.
A: Netflix and Verizon Communications reached an agreement to provide a direct connection from the video service to broadband customers in 2014.
A: Netflix currently offers three streaming plans: Standard with Ads, Standard, and Premium, starting at $6.99 per month and ending at $22.99 per month. The cost of adding another user to a subscription plan is $7.99 per month. Standard and Premium subscriptions are the only plans that offer extra member additions.
A: Yes, it is possible to share your account within a single household. Everyone living in that household can use Netflix wherever they are.
A: The number of devices that can be used with one account depends on the subscription plan. The Standard plan allows two devices to stream at a time. The Premium plan allows up to four devices to stream at a time.
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