Mega media conglomerates, struggling with legacy properties, can take a step back. After decades of dominance, their primacy is over. Netflix Inc. (NASDAQ: NFLX) has become the premier media company in the world. Its latest earnings prove that.
Netflix added 13.1 million subscribers compared to the same quarter a year ago. This was well above expectations and the largest increase since people were shut in during the worst of the COVID-19 pandemic. This was even though Netflix killed password sharing. However, it may be that people who could not share passwords moved to paid subscriptions.
Netflix also offered that advertising running in-stream would be a growing source of revenue. Amazon, Google and Facebook dominate the digital marketing industry. However, Netflix has a large enough audience that it could be a force in the sector.
One argument insists that the streaming industry has become saturated. Netflix management says otherwise: “We believe there is plenty of room for growth ahead as streaming expands, and our north star remains the same: to thrill members with our entertainment.” With revenue of $8.8 billion in the most recent quarter, Netflix posted an improvement of 12% year over year. Per-share earnings were $2.11, compared to $0.12 a year ago. (These 25 American industries are booming.)
The Also-Rans
Warner Bros. Discovery Inc. (NASDAQ: WBD), Paramount Global (NASDAQ: PARA), Walt Disney Co. (NYSE: DIS) and Apple Inc. (NASDAQ: AAPL) are in the tier below Netflix and Amazon. Apple does not break out results for its Apple TV+, but it is a tiny fraction of the company’s total. For the media companies, streaming is core to their growth. However, each one loses money on the business.
As a proxy of how investors view legacy media companies versus Netflix, note that Netflix has a market cap of $235 million while Warner Bros. Discovery’s is $25 billion.
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