Switch language:


What will Netflix do next?

The rise and rise of Netflix has stalled in 2022, but can the streaming company reinvent itself to fight off multiple headwinds?

  • Share on Linkedin
  • Share on Facebook

netflix strategic plan for future growth

From November 2022, Netflix will introduce a cheaper ad-supported subscription option, a move that seemed improbable just a year ago. Netflix’s strong ethos for serving its customers included a frequently reiterated promise by founder Reed Hasting that the streaming giant would never include advertising. However, changing market conditions and a reversal of the company’s fortunes have called for drastic measures.

The rise and (potential) fall of Netflix serves as a cautionary tale for all Big Tech disruptors . The company’s staggering growth trajectory had at one time seemed unstoppable. Founded in 1997 by Hastings and Marc Randolph in Scotts Valley, California , Netflix started life as a DVD rental business. Today, the company is valued at $102bn, is reportedly responsible for around 10% of the world’s internet traffic and has revolutionised the business of television entertainment. However, after more than two decades of growth, 2022 saw the company’s subscriber growth slow for the first time and its domination of the television streaming industry called into question.

Go deeper with GlobalData


Corporate Governance Trends by Sector - Thematic Intelligence

Corporate governance trends in banking - thematic intelligence, data insights.

The gold standard of business intelligence.

Find out more

Related Company Profiles

Netflix inc, gartner inc, bloomberg lp, sandvine corp, jpmorgan chase & co.

Netflix went public in 2002, at which time it was still mostly focused on DVD rentals, with revenues of around $150m. A strategic pivot in 2007 to the entertainment streaming business saw the company invest more than $40m in data centres as well as striking favourable deals for stacking rights to high-quality content (stacking rights are distribution rights to an entire library boxset). It was a gamble that would pay off. By the end of 2007, Netflix’s revenues had grown to a whopping $1.2bn. Early competitors Amazon Prime and Hulu simply couldn’t compete on the kind of high-quality franchise content Netflix had managed to negotiate as a first mover.

The growth years continued, with Netflix going global in 2016, expanding to 190 countries. The company led the market with growing subscription numbers in excess of 100 million and award-winning original content – a strategy it would continue to pursue by producing original content, starting with House of Cards in 2013 and more recently Stranger Things , Lupin and Squid Game .

Even a pandemic failed to halt the streaming giant’s runaway success. In fact, global lockdowns saw Netflix add 36 million subscribers in 2020, according to Statista. In 2021, Netflix had approximately 222 million paid memberships, achieved approximately $30bn in revenue, representing 19% year-on-year growth, and more than $6bn of operating income, representing 35% year-on-year growth. However, while the company had added 8.3 million subscribers in the last three months of 2021, bringing total subscriber growth for the year to 18.2 million, it was the lowest annual subscriber gain since 2016.

Has Netflix lost its edge?

Fast-forward to the company’s 2022 second quarter earnings report in April and Netflix’s track record hit an inflection point, with the streaming giant losing subscribers for the first time after what had been a decade-long ascension. Markets reacted swiftly with a 60% drop in the company’s stock value, wiping out more than $54.4bn from the company’s market capitalisation.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

netflix strategic plan for future growth

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

The hitherto undisputed winner of the so-called streaming wars, Netflix has seen its clear lead diminishing to competitors including Disney Plus, Amazon Prime and Apple TV. The streaming wars have long depended on the notion that ‘content is king’, thereby ensuring the massive growth in subscriber numbers that has made Netflix the market leader. In this regard, Netflix established itself much like any other television entertainment studio that preceded television streaming, with award-winning original content and franchised content such as Breaking Bad , for example.

However, the streaming wars are no longer being fought simply over content. A number of challenges threaten Netflix’s market dominance. The company puts its change in fortune down to factors including Russia’s invasion of Ukraine and the company’s subsequent exit from Russia, increasing market competition, revenue loss from subscriber password-sharing and a global cost of living crisis. However, other, equally pertinent, factors include the cost and unrelenting requirement of producing high-quality content, malcontent internet service providers (ISPs) struggling to accommodate Netflix-originated internet traffic volumes, as well as straightforward market saturation.

Will Netflix with ads save the company?

In October 2022, JP Morgan analyst Doug Anmuth issued a note predicting that Netflix’s move to incorporate an ad-supported product offering could drive the growth of an additional 7.5 million new subscribers to its existing subscriber base in 2023 within its North American markets, rising further to 22 million subscribers by 2026. And markets certainly seem to echo Anmuth’s optimism as Netflix stock rose 19% from July to October 2022 after the move was announced.

While consolidated revenues for 2021 increased 19% compared with 2020, paid net membership additions (essentially growth in subscriptions) in 2021 decreased by 50% compared with 2020. Despite slowing subscription growth, Netflix’s services continued to grow globally, with more than 90% of paid net membership additions in 2021 coming from outside North America.

GlobalData thematic research service director David George says that the company’s path to growth lies in developing markets. He sees the move to introduce advertising and a push into developing markets as a hybrid growth model. “While advertising is not a geographic shift, I think it is about stabilising the subscriber base while looking to grow in developing markets,” says George.

He expects to see a rationalisation of subscriber revenues due to the cost of living crisis in Western markets but points out that some entertainment streams have proved relatively recession-proof historically. In markets such as Africa and India, Netflix is launching low-cost or free products for a long-term growth strategy. “We are talking years, rather than months, for those subscribers to upgrade to some kind of paid model,” says George, adding that developing markets will always hold this challenge. “You can have five million subscribers in India, but they are all paying a dollar a month instead of nine,” he says.

Another challenge that George highlights is the business environment where content is so broadly distributed by so many different channels. He even goes as far as to say that Netflix’s dominance was simply a question of semantics.

“The definition of content delivery is now so incredibly broad,” says George. “The amount of video that is consumed on YouTube or TikTok, for, example is enormous. It is about how you define your market. If we are defining Netflix as a paid-for streaming service, then it is, of course, a big player, but if you define the content market as ‘where do people spend their time watching video content’, then Netflix is nowhere near the big players – and I think that is the challenge the company faces.”

Netflix is also deploying other strategies to mitigate subscriber losses. Subscriber password-sharing is said to cost the company billions of dollars. The company estimates that in addition to its 220 million paying households, an additional 100 million households are sharing passwords. To recoup these losses, the company is said to be trialling a new feature in Chile, Costa Rica and Peru that charges those who share passwords in separate households.

Netflix and FDI

Netflix’s global presence across 60 countries included approximately 11,300 full-time employees as of 31 December 2021. Of these, 8,600 (76%) were located in the US and Canada, 1,400 (12%) in Europe, the Middle East, and Africa (EMEA), 400 (4%) in Latin America and 900 (8%) in Asia-Pacific. The company also has fluctuating numbers of part-time content production employees. In 2021, the US and Canada region accounted for 43.7% of the company’s revenue, followed by EMEA with 32.7%, Latin America with 12% and Asia-Pacific with 11%.

Investment Monitor’s FDI Projects Database shows that Netflix’s new foreign direct investment projects outnumbered FDI expansion projects between 2019 and 2021, which indicates that the company is actively expanding overseas and into new markets.

Investment overseas was more heavily weighted in Europe than other regions, despite a significant push towards South Korea (which is no coincidence as Netflix’s 2021 South Korean original series Squid Game is believed to have delivered $891m of 'impact value', according to leaked internal data reported by Bloomberg ). Building on the success of Squid Game , Netflix is planning a reality show based on the series. The Squid Game impact can be seen in Netflix's second-quarter earnings for 2022, showing the strongest revenue growth in Asia-Pacific with an increase of 23% on the previous year, compared with 8.6% revenue growth across all regions.

Netflix continues to make acquisitions a part of its growth strategy. In March 2022, the company announced the purchase of Finnish gaming software company Next Games and US-based Boss Flight Entertainment in a continued push to enter the cloud gaming market. However, the news of Netflix's gaming acquisitions comes on the heels of Google’s announcement in February 2022 of its in-house gaming development studio Google Stadia – not a bullish sign for cloud gaming overall. In July 2022, Netflix announced plans to acquire Australian animation studio Animal Logic to support the company’s original animated film content – continuing the focus on its core strength of high-quality content delivery.

Peering agreements threaten Netflix's bottom line

A potential major roadblock to Netflix’s bottom line, one which may hamper the company’s growth aspirations, involves its symbiotic relationship with the ISPs streaming its content. Although the internet may appear to be a singular pipeline for the world’s internet traffic, it is actually made up of a complex web of local networks, connecting networks and larger ISPs. These networks agree to allow traffic to pass between them through what are known as ‘peering agreements'. This works well until a company such as Netflix comes along with 9.39% of all global downstream traffic in 2022, according to Sandvine 's 2022 Global Internet Phenomena Report.

Even accounting for a decrease (Sandvine's same report in 2019 found that Netflix took up 11.4 % of the total global downstream traffic), the volume of Netflix’s internet traffic means that peering agreements may prove a challenge in the short to medium term in Asia, Europe and the US, according to Hosuk Lee Makiyama, director of think tank the European Centre for International Political Economy and senior fellow at London School of Economics. “Network owners want to get paid for the traffic Netflix generates, which could easily kill its profits,” he says.

An ongoing landmark legal case in South Korea continues between Netflix and South Korean internet provider SK Broadband. Netflix is arguing for settlement-free peering to run its content over SK Broadband, whereas the internet service provider is demanding compensation. Investment Monitor’s FDI Projects Database registered three projects on behalf of Netflix in South Korea across 2021 and the first half of 2022, demonstrating significant expansion into the region and making peering agreements a critical challenge to its growth in the country.

Similarly contentious, the EU is exploring a mandatory tax for content providers such as Netflix to address what some view as an inequity created by the fact that ISPs cannot charge consumers based on the volume of content they view. Even the Federal Communications Commission in the US is looking at ways to compensate broadband network operators via some kind of fee, says Lee Makiyama. “That means lots more overheads for Netflix having to place servers everywhere to avoid the costs or otherwise just accepting the fees,” he adds.

Broadband providers essentially ‘own’ the end user at the platform level with customer contracts. It is an ‘all-you-can-eat’ model, according to Gartner analyst Phil Dawson. “But this is a shifting model," he adds. "What’s interesting is that content – business or social – has changed the relationship with the content provider, which means who owns the content now outweighs the delivery of the content. We are going from the all-you-can-eat model to the true utility model of how much we have used.”

In this respect, Netflix has become a real threat to the telecoms sector and the pushback may present significant challenges for the company. Content providers are increasingly at the mercy of ISPs – who owns the end point is becoming more important, adds Dawson. Netflix has responded to the situation by issuing the following statement: “We fight for free interconnection, where neither side charges the other, as we think Netflix and consumers are best served by strong network neutrality.” The company added: "We don't intend to try to collect a percentage of broadband revenue from ISPs, despite the fact that we are a substantial portion of what consumers do with their internet connection, and that this payment would parallel the payments to basic cable networks." What might have historically appeared a rapid ascension and wholesale disruption of television entertainment was, in actual fact, a combination of market opportunism and a long-term outlook that took account of both the evolution in technology and consumer habits. After all, Netflix had been operating for two decades before it became an 'overnight success' in 2007. It was a company that once seized the zeitgeist and changed the TV entertainment landscape forever – what remains to be seen is whether it can transform itself again, this time against the backdrop of a market in flux.

Sign up for our daily news round-up!

Give your business an edge with our leading industry insights.

More Relevant


How has Brexit impacted UK business, and what should the new government do?

Ai-powered mobility: finding the right environment to test new tech to scale, cirro fulfillment opens new centre in lichfield to enhance its uk and european operations, uk election briefing: how would a labour win impact businesses, sign up to the newsletter: in brief, your corporate email address, i would also like to subscribe to:.

Investment Monitor In Brief

I consent to Verdict Media Limited collecting my details provided via this form in accordance with Privacy Policy

Thank you for subscribing

View all newsletters from across the GlobalData Media network.

netflix strategic plan for future growth


  • The Magazine
  • Newsletters
  • Managing Yourself
  • Managing Teams
  • Work-life Balance
  • The Big Idea
  • Data & Visuals
  • Reading Lists
  • Case Selections
  • HBR Learning
  • Topic Feeds
  • Account Settings
  • Email Preferences

The Best Way for Netflix to Keep Growing

  • Andrei Hagiu

netflix strategic plan for future growth

Allowing third-party content could lead to new forms of revenue and new subscribers.

Netflix’s model has been undeniably successful to date. However, fighting the blockbuster content-acquisition and creation battle is becoming ever more expensive, and it involves an increasing number of combatants. Furthermore, the growth of Netflix’s subscriber base is slowing down. Netflix can and should become a platform. Why? Its big subscriber base (130 million worldwide) and content-delivery infrastructure are potentially very attractive to many third parties, including video content providers, developers of cloud gaming, and marketers. How would it become a platform? Simply by allowing these third parties to sell their products or services within Netflix’s service but outside Netflix’s subscription, on terms controlled by the third parties.

Netflix has a lot to gain by becoming a multisided platform.

netflix strategic plan for future growth

  • Andrei Hagiu is an associate professor of information systems at Boston University’s Questrom School of Business. theplatformguy

Partner Center


Long-Term View

Netflix's view: streaming entertainment is replacing linear tv.

People love movies and TV shows, but they don't love the linear TV experience, where channels present programs only at particular times on non-portable screens with complicated remote controls. Now streaming entertainment - which is on-demand, personalized, and available on any screen - is replacing linear TV.

Changes of this magnitude are rare. Radio was the dominant home entertainment media for nearly 50 years until linear TV took over in the 1950’s and 1960’s. Linear video in the home was a huge advance over radio, and very large firms emerged to meet consumer desires over the last 60 years. The new era of streaming entertainment, which began in the mid-2000’s, is likely to be very big and enduring also, given the flexibility and ubiquity of the internet around the world. We hope to continue being one of the leading firms of the streaming entertainment era.

Streaming Entertainment Apps

The world's leading linear TV networks now offer their programming on-demand through apps that run on phones and smart TVs. These apps, such as Disney+, HBO Max, Paramount+, and BBC iPlayer enable binge viewing and catch-up viewing. Existing linear networks that offer compelling internet apps will generate more viewing and become more valuable. Those networks that fail to develop first-class apps will lose viewing and revenue.

Streaming entertainment is expanding rapidly because of:

  • Ecosystem Growth: The internet is getting faster and more reliable, while penetration of connected devices, like smart TVs and smart phones is also rising
  • Freedom and Flexibility: Consumers can watch content on demand, on any screen, and the experience is personalized to individual tastes
  • Rapid Innovation: streaming entertainment apps have frequent improvement updates and streaming is the primary source of UHD 4K video content.

Eventually, as linear TV viewing falls in viewing and value, the spectrum it now uses on cable, fiber, and over-the-air will be reallocated to expand internet data transmission. Satellite TV subscribers will be fewer and more rural. In a few decades, linear TV will be the fixed-line telephone: no longer mainstream.

Content People Love

In 2018, we expect to spend close to $8B on a P&L basis on content for our members. In addition we'll spend approximately $2B on marketing in 2018, getting people so excited about our content that they join Netflix.

People's tastes are very broad, even in a single market. The internet allows us to offer a wide variety, and to have our user interface quickly learn and make recommendations based upon individual users' tastes. Those members who love action blockbusters, Korean soaps, anime, sci-fi, Sundance films, zombie shows, or kids cartoons will find that Netflix fills their homepage with relevant and interesting titles.

Our licensing is generally time-based, so that we might pay for a multi-year exclusive subscription video-on-demand (SVOD) license for a given title. In each market, we license content from multiple suppliers, mirroring the fragmentation of the content industry. Typically our bids are for exclusive access to the SVOD rights, and we are up against various cable and broadcast networks, as well as online video competitors. As a rule, content owners always want another bidder, and never want one bidder to become too strong.

Since 2013, we've been at a scale where we can economically create original content for Netflix and our offering has improved as we grow further and gain greater confidence. With each original, we learn more about what our members want, about how to produce and promote effectively, and about the positive impact of originals on our brand.

We believe we have a major advantage over our linear competitors when it comes to launching a series or a film. Linear networks need to attract an audience on a given night at a given time and movie theaters need to maximize attendance for a finite number of screens. We can be much more flexible. Because each show on Netflix is not competing for scarce prime-time slots like on linear TV, a show that is taking a long time to find its audience is one we can keep nurturing. This allows us to prudently commit to a whole season, rather than just a pilot episode. In addition, we are able to provide a home for more creative storytelling (varying run times per episode based on storyline, no need for week-to-week recaps, no fixed notion of what constitutes a "season"). We believe this makes it easier for us to attract creative talent.

By personalizing promotion of the right content to the right member, we have a large opportunity to promote our original content, one that's effectively unlimited in duration. Long after the premiere of season one of House of Cards , large numbers of members still started the series.

We are making great headway with our slate of original series and films, which is a rapidly growing proportion of our spending. Any linear network would be proud to show them. Our success is due in part to great creative execution by our team as well as the power of our large on-demand service.

Netflix Focus

Netflix is a global streaming entertainment service offering movies, TV series and games, with unlimited viewing on any internet-connected screen for an affordable, no-commitment monthly fee. Netflix is a focused passion brand, not a do-everything brand: Starbucks, not 7-Eleven; Southwest, not United; HBO, not Dish.

We are not a generic "video" company that streams all types of video such as news, user-generated, live sports, porn, and music videos. We are a movie, TV series and games entertainment service.

We are a relief from the complexity and frustration that embody most MVPD relationships with their customers. We strive to be extremely straightforward. There is no better example of this than our no-hassle online cancellation. Members can leave when they want and come back when they want.

We are about the freedom of on-demand and the fun of binge viewing. We are about the flexibility of any screen at any time. We are about a personal experience that finds for each person the most pleasing titles from around the world.


We compete for a share of members' time and spending for relaxation and stimulation, against linear networks, pay-per-view content, DVD watching, other internet networks, video gaming, web browsing, magazine reading, video piracy, and much more. Over the coming years, most of these forms of entertainment will improve.

If you think of your own behavior any evening or weekend in the last month when you did not watch Netflix, you will understand how broad and vigorous our competition is.

We strive to win more of our members' "moments of truth". Those decision points are, say, at 7:15 pm when a member wants to relax, enjoy a shared experience with friends and family, or is bored. The member could choose Netflix, or a multitude of other options.

Because the entertainment market is so broad, multiple firms can be successful. For example, ABC and NBC have historically competed for viewers, attention and content but have also successfully co-existed for many decades. Similarly, in the streaming entertainment world, HBO is now growing faster than in years past, while our business is also expanding. Many people will subscribe to both HBO and Netflix since we have different exclusive content. The transition to streaming entertainment, with its greater consumer satisfaction, will mean growth for many services.

Video piracy is a substantial competitor for entertainment time in many international markets. It is free and offers very broad selection. Were video piracy to become easy, reliable, and socially acceptable, it could become our largest competitor. Great inexpensive services like Netflix will hopefully help insulate video from piracy .

ISP & MVPD relationships

ISP subscribers pay for internet access and expect to be able to enjoy streaming entertainment such as Netflix. Our Open Connect program supports hundreds of large and small ISPs to directly interconnect with the Netflix network for free in regional locations, rather than going through third-party transit providers, which lowers both our costs and that of the ISPs.

Sometimes, large ISPs want to use their market power to extract interconnect fees from us and others. We fight for free interconnection, where neither side charges the other, as we think Netflix and consumers are best served by strong network neutrality. We have made good progress in these battles, and they are usually country and ISP specific. We don't intend to try to collect a percentage of broadband revenue from ISPs, despite the fact that we are a substantial portion of what consumers do with their internet connection, and that this payment would parallel the payments to basic cable networks. Strong net neutrality, where payments are neutral between ISPs and content providers, is better for supporting amazing innovation for consumer benefit.

With MVPDs that have an internet-capable TV set top device, such as DISH and Comcast (USA), Virgin (UK), Telus (Canada), Orange and Free (France), Liberty Global and Sky (across Europe) and many others, we offer integrated viewing experiences (and in many cases integrated billing) which increase the use of the operator set top device. Most MVPDs prefer that our growth happen through their remote control and set top experience.

Netflix margin structure

Our operating margin structure is set mostly top down. For any given future period, we estimate revenue, and decide what we want to spend, and how much margin we want in that period. Competitive pressures in bidding for content would lead us to have slightly less content than we would otherwise, rather than overspending. The same is true for our marketing budget. The output variable is membership growth that those spending choices influence. With our rapid increase in content spending, and our growing emphasis on owned original productions, cash outlays are initially greater than content amortization, constraining near term free cash flow relative to profitability. We amortize content as quickly as justified, given industry norms and viewing history.

Netflix is available virtually everywhere except in China and Russia . Our growth internationally will unfold over many years as we improve our service. In the 130+ new markets we launched in 2016, we started by primarily targeting outward-looking, affluent consumers with international credit cards and smartphones. As with every market we’ve launched, our approach is to listen, learn and improve rapidly, adding more content, languages and a better Netflix experience over time to delight members.

We understand that awareness of Netflix in these new markets is mixed and that there are cultural differences and some variances in content tastes around the world. There are also challenges with the broadband and payment infrastructures in certain countries. But we also believe in the growing ubiquity of the internet and rapid technological progress and that great, high-quality storytelling has universal appeal that transcends borders.

That’s why we are increasingly licensing and producing content all across the globe and Netflix members everywhere in the world can increasingly enjoy the same movies and TV series at the same time, free of legacy business models and outdated restrictions. In addition, we are developing a growing number of non-English language originals from places such as Mexico, France, Italy, Japan and Brazil, to name just a few. With our global distribution, Netflix is well positioned to bring engaging stories from many cultures to people all across the globe.

As Netflix expands globally, we understand that consumers and governments' expectations will rise. We expect to meet those expectations and work with policymakers to ensure that the old policies that applied to linear TV are not reflexively applied to streaming entertainment.

We started in 1997 as a DVD-rental-by-mail firm, and spent the first five years struggling to get to a sustainable model that was cash flow positive. We spent most of the next five years fighting with Blockbuster in the US. We began streaming in the US in 2007, and internationally in 2010. Our sobering Qwikster DVD misstep was in 2011. Our first original series debuted in 2013. We became global in 2016, nearly twenty years after starting Netflix. Over the following decades, streaming entertainment will replace linear TV, and we hope to keep leading by offering an amazing entertainment experience.

[Updated October 19, 2022]

This document contains certain forward-looking statements within the meaning of the federal securities laws, including statements regarding our outlook concerning the development of internet TV and the decline of linear TV; the scope, timing and players involved in this transformation to internet TV; our approach to being an internet TV network, including improvements to our service features and content licensing, development and financing; content, marketing and technology and development spending; the impact of competition; our relationship with ISPs; strategy for China; international growth, localization of our service; our margin structure, including US and global contribution margins; subscriber growth; revenue, operating profit and cash flow; and government relations.

  • Netflix.com
  • Terms of Use
  • Privacy Policy

Leadership & Success

Netflix’s business strategy: what your company can learn.

Emily Fata

This article is part of our Business Strategies series, an insight and analysis into the makeup and model of some of the world's most successful startups.

A streaming content service provider and, increasingly, production company, Netflix is responsible for massive shifts in consumer viewing patterns and has almost single-handedly changed the way we experience media forever.

From a simple DVD sales and rental platform to a global streaming behemoth, we're taking a closer look at Netflix's business strategy – and what you as a business owner can learn from it.

Vital Information

Netflix's corporate strategy can be summarised in its mission and vision statements:

We promise our customers stellar service, our suppliers a valuable partner, our investors the prospects of sustained profitable growth, and our employees the allure of huge impact.

'Netflix Mission Statement'

Becoming the best global entertainment distribution service.

'Netflix Vision Statement'

Key Details

  • Founded: August 1997
  • Founders: Reed Hastings and Marc Randolph
  • Headquarters: Los Gatos, California, USA
  • Current CEO: Reed Hastings
  • Global Employees: 7,100 (2018)
  • Type: Public (floated May 2002)
  • Initial Funding: $2.5m self-funding
  • Key Products / Services: Content streaming, content distribution and content production

Netflix HQ in Los Gatos, California

Given its current status as an established unicorn , the origins of Netflix now seem somewhat quaint. Frustrated by Blockbuster's $40 late fee (when returning a VHS copy of  Apollo 13 , no less), current CEO and company co-founder Reed Hastings resolved to overhaul the then-established order of video rental.

The result was a subscription-based business model , with the unique selling point being the abolishment of due dates and late fees, as well as providing users with unlimited access to the company's content library.

However, while this strategy received modest success and proved scalable, it wasn't until dramatic shifts in technology – namely internet download speeds – that Netflix was truly able to come into its own. 

Realising the potential of the digital revolution, Hastings ripped up the business plan and incorporated a new focus for the company - video streaming - and, despite initial apprehension from investors, the rental model was phased out across 2010 and 2011.

Netflix's Business Model

Still a subscription-based service today, customers can access an entire library of TV shows and movies in one easily-accessible place - and from a multitude of devices, too, including smart TVs, mobile phones, laptops, tablets and media sticks.

However, it's not just about recycling existing content; in 2013, Netflix aired  House of Cards , a critically-acclaimed political drama starring A-list actors such as Kevin Spacey. This was the first taste of Netflix's original content, now branded as Netflix Originals; similar productions, such as  Orange Is the New Black ,  Stranger Things  and  13 Reasons Why  have followed suit to great success.

Investment in original content 2014-2018 ($bn):

Netflix content investment graph

The company is also increasingly expanding into high-budget feature-length productions, including Martin Scorsese's  The Irishman , a $160m production that was initially dropped by Paramount Pictures. This is a particularly intriguing area for Netflix, as in many cases, the cost of a cinema ticket now exceeds the company's monthly subscription cost. This, in turn, raises the genuine possibility that moving forward, Netflix could even begin to disrupt the entire motion picture industry.

The company also invests in curating the best foreign-language shows from around the world and, in some cases, even re-editing them to align more closely with the Netflix format; Spanish heist thriller  La Casa de Papel  is a hugely successful example of this. It also seeks to continue popular programmes that were discontinued or cancelled by other distributors, such as  Black Mirror ,  Arrested Development  and  Trailer Park Boys , while a children's only library of content has also met with a positive reaction.

Crucially, the company offers a no strings attached, one-month free trial, too, which enables potential customers to access all of the available content. According to a study by wealth management firm Merriman Capital, the conversion rate of these free trials is a staggering 93%, which is well above the average conversion rate of 65% for other streaming services.

While it is, of course, not the only enterprise to offer such content, Netflix, through a combination of smart marketing, aggressive expansion and an ability to create culturally significant content, has established itself as the undoubted market leader.

Sample % of US viewing habits in 2018:

Netflix Consumer Viewing Habits

While, in itself, Netflix's content library offers worth to customers, its true value - as touched upon - lies in the exclusivity of its most popular content. Take  The Haunting of Hill House , for example, a Netflix-produced miniseries that aired on the platform in 2018.

Positively received by critics and audiences alike, the show attracted tremendous hype across social media platforms, almost creating a zeitgeist of its own - particularly with younger viewers. To be a part of this cultural phenomenon, however, viewers had to purchase a subscription - or at least sign up to the free trial.  The Haunting of Hill House  wasn't a one-off, either, with the likes of  Making a Murderer ,  Abducted in Plain Sight  and  Bird Box  having a similar effect, and establishing Netflix as merely the platform on which to access the product.

That's not to undersell the platform, though; convenience is another key aspect of Netflix's value. With an easy-to-navigate user interface and a host of handy features (such as the ability to skip the opening credits of a show, or watch trailers and deleted scenes), the company understands the viewing habits of its users. It also follows consumer trends in general ; content suggestions are heavily personalised, for example, while the ability to view content offline allows users to watch during commutes, plane journeys, or indeed anywhere that its users wish.

In terms of its customers, Netflix's most important partner is perhaps Amazon, whose AWS cloud servers provide crucial support and hosting for all the company's digital needs. If its servers are down, then its customers cannot access their content, so this relationship must be robust.

Netflix also works with numerous global telecommunications providers; in the US, for example, it interacts with the likes of Verizon, AT&T and Comcast at exchange points to ensure that users receive a smooth service.

Of course, it also works heavily with content providers and production companies, too. Given the location-based nature of what it can and can't show, the company must build relationships with a whole host of television networks and distribution studios all over the world, especially given the frequently revolving content that it features from month to month.

Officially established in 1998, Netflix has remained under the control (or co-control) of Hastings since its inception, with the company continually growing year-on-year. As with many Silicon Valley-founded enterprises, his  leadership style  is heavily non-traditional.

CEO: Reed Hastings (1999-present)

Credited with a transformational -bordering-on- laissez-faire leadership style, Hastings isn't interested in telling his employees what to do; instead, he trusts in the company's hiring process, adhering to the Steve Jobs mantra of letting hires "tell us what to do".

This is illustrated by his decision in 2013 to greenlight  House of Cards , a process which reportedly took just 30 minutes. According to Hastings, the choice was an easy one, as the groundwork done by Netflix's employees was so comprehensive.

CCO: Ted Sarandos (2000-present)

With an annual content budget of $6bn, Ted Sarandos is responsible for greenlighting Netflix's original programming; under his watch, the company's shows have received over 120 Emmy nominations.

Perhaps more significantly, though, Sarandos has implemented a unique approach to content production. Utilising a combination of personal judgement and data-driven algorithms for greenlighting decisions, he has described traditional TV network models as outdated. For instance, Sarandos does not order pilot episodes for potential productions; he also prefers to give shows a chance to develop a fan base over multiple seasons, rather than to cancel underperforming shows straight away.

Netflix's Branding Strategy

As the company has evolved, so too has its brand strategy . Certain aspects of this are more visible - such as the numerous company logo changes - while others are more subtle.

Thanks to the company's in-depth analysis procedures, Netflix is able to reach its global target audience while still maintaining regional markets. When looking at the years 1999 to 2017, for instance, Netflix jumped from 110,000 subscribers in the US alone to 104 million, more than half of whom were located outside the United States. This increase in global interest is reflective of the company's inclusive business model, which takes into consideration international interest in their services; given that the company's brand value  more than doubled  in 2018 to around $21.2bn, it's a strategy that is certainly working.

Number of paid Netflix subscribers 2012-2018:

Netflix Subscriber Count

Crucially, Netflix also understands the demographics of its core target market, as evidenced by the humourous and light-hearted nature of its social media marketing strategy.

Netflix Twitter message Dec 10, 2017


Various big-name content streaming services have attempted to dominate the market in recent years: Hulu, Amazon Prime, and Apple TV are serious competitors, while Google, Disney and TimeWarner are all getting in on the act. Netflix has continued to maintain market leadership, though, in spite of massive investment and diversification in Amazon Prime in particular.

Although Netflix (at the time of writing) leads the way in terms of subscribers, revenue and investment in content, this diversification has the most potential to create problems for Netflix. Amazon Prime, for instance, has recently acquired live broadcasting rights for the English Premier League, which will likely lead to a significant spike in subscriptions and a potential knock-on effect. In terms of content, it is also attempting to go head-to-head with Netflix; for example, its upcoming  Lord of the Rings  series will be the most expensive ever made, with a staggering budget of $1bn.

Comparison of paid subscribers in 2018:

Netflix subscriber comparison graph

It remains to be seen how this will affect Netflix's market dominance over the next five years, but for now, its tried and tested strategy of producing high-quality, exclusive content seems to be serving it well.

Netflix's Company Culture

Under a CEO that requires self-motivated and innovative employees, Netflix boasts a highly unique company culture . The company's careers page is proof of this, emphasising the focus on transparency, accountability and independent decision-making, while it even routinely encourages employees to interview with competitors to attain a greater understanding of their market rate.

The company has also attracted criticism for its culture, however, particularly its own stark admission that it "keep(s) only our highly effective people". Some former employees have spoken out about this high-pressure, performance-driven environment, although it should be noted that Netflix themselves admit that this lack of stability is only motivational for a select few . Either way, the company's growth and success to this point suggest that such a brutal culture is working, while Bretton Putter makes a good point in Forbes: the entire point of having a company culture is that it's not meant to be for everybody.

As with all successful startups, Netflix's ability to scale is as a result of its leadership identifying external opportunity – in this case, the potential of video streaming. The company's corporate strategy has evolved massively over the past two decades and is seemingly poised to change again over the next one, but its commitment to producing quality content will always ensure that it has a paying audience at the heart of what it does.

Key Takeaways

  • Offer something exclusive  — What separates Netflix from competing providers is not its existing library, but the unique content it has invested in and created exclusively for their platform. Always ensure that you offer your customers something that they can't get elsewhere.
  • Reach a global market  — Creating an international service adaptable to any regional market has been crucial to Netflix's growth. When devising your initial business plan , always consider how your business model might scale.
  • Move with the times  — Netflix began as a regional mail-order DVD rental service in 1997, but with the swift shift and expansion of the internet, they adapted and altered their services drastically. Always look to identify where potential opportunities could work to your benefit.
  • Company culture should reflect the CEO  — Different companies extol different virtues, but they should always reflect the company's goal. Only recruit people that share the same values and motivations as you, and your culture will evolve naturally.

For similar insights, don't forget to take a look at our breakdowns of Apple and Uber's business strategies, either!

What other lessons can we take from Netflix's business strategy? Let us know your thoughts in the comments below.

Brand Strategy

Subscription-Based Business Model

Company Culture

Business Strategies

Business Models

Case Studies

Panmore Institute

  • About / Contact
  • Privacy Policy
  • Alphabetical List of Companies
  • Business Analysis Topics

Netflix’s Competitive Strategy & Growth Strategies

Netflix competitive strategy, growth strategies, Porter, Ansoff, entertainment and video streaming business case study and analysis

Netflix’s competitive strategy and growth strategies define the operational activities and tactics for developing the business. The competitive advantages based on the company’s generic competitive strategy support competitiveness against many large firms in the entertainment industry. Netflix’s intensive growth strategies use these competitive advantages to grow the business, such as by competing to grow the company’s market share. The company’s strategic objectives indicate the importance of low costs and a large international subscriber base. The combination of Netflix’s competitive strategy and growth strategies ensures that the company improves its financial performance and finds new ways to generate more revenues.

The appropriateness of Netflix’s competitive strategy depends on the industry situation and the competitive environment. The company’s strategic prioritization of cost effectiveness for competitive advantage is based on the industry environment where many firms compete based on price. As a result, Netflix’s growth strategies prioritize market share growth to ensure profitability despite low-cost measures.

Netflix’s Competitive Strategy

Netflix’s competitive strategy is cost leadership , which functions as the primary strategy for the company’s competitive advantages. According to Porter’s model of generic strategies, cost leadership ensures competitive advantage based on low costs that can be used to offer competitive prices to the company’s target customers, e.g., subscribers. The cost-based nature of this competitive strategy has wide-ranging effects on Netflix’s strategic objectives. For example, competitive prices facilitate market reach maximization, which is a strategic goal based on Netflix’s mission statement and vision statement . Low costs enable profitable operations despite low prices, which attract more subscribers around the world. This means that Netflix’s competitive strategy of cost leadership facilitates endeavors for growing the company’s market share.

Netflix also uses differentiation as a secondary competitive strategy. The goal of this strategy is to develop competitive advantages based on factors that make the company stand out when compared to rivals. For example, as one of Netflix’s competitive strategies, differentiation is implemented in the production of original content (movies and series), which ensures the company’s competitive advantages by retaining subscribers who prefer to watch content that is not available from competing video streaming services. These competitors include the entertainment production and streaming services of Disney , NBCUniversal, and Sony , as well as Google’s (Alphabet’s) YouTube, Apple , Amazon , Microsoft , and Facebook (Meta) . The Five Forces analysis of Netflix demonstrates that these companies’ competitive strategies create a challenging industry environment. Netflix’s competitive strategy of differentiation helps address this competition and its strategic challenges.

Netflix’s Growth Strategies

Netflix’s growth strategy is market penetration , which is the primary driver of the company’s growth and expansion in the international market. In Ansoff’s matrix, this intensive growth strategy’s objective is to grow the business by selling more of current products to the company’s current market. For example, Netflix aims to gain more subscribers through its current operations in North America, Europe, and Asia. A bigger market share equates to higher revenues and a bigger market presence that can be used to launch new products. For this intensive growth strategy of market penetration, the competitive advantages enumerated in the SWOT analysis of Netflix are used to penetrate markets and gain market share despite competition. Also, the generic competitive strategies of cost leadership and differentiation enable attractive pricing and unique entertainment content, respectively, to attract more subscribers for this growth strategy of market penetration.

Netflix also uses product development as a secondary growth strategy. The Ansoff matrix states that this intensive growth strategy involves offering new products to the company’s current market. In this case of Netflix’s growth strategy, the company’s strategic objective is to produce new original movies and series, which are new products for current and new subscribers in current markets. New original content makes the company’s streaming service an attractive option for customers. The requirements of product development as an intensive growth strategy apply to Netflix’s operations management , such as in maximizing productivity in producing new movies and series. New entertainment content resulting from the application of this growth strategy contributes to uniqueness that enables the company’s generic competitive strategy of differentiation.

Netflix applies diversification as a minor growth strategy with a limited impact on the company’s current business growth. In Ansoff’s matrix, this intensive growth strategy’s objective is to produce new products for new markets. In this case of Netflix’s growth strategy, product development involves offering entirely new products other than the company’s initial core offerings. For example, the company now offers mobile games. The mobile gaming market can support new business growth by attracting gamers, especially those who do not yet have a Netflix account. As a growth strategy, diversification involves new teams, groups, or divisions in Netflix’s organizational structure (business structure) , which influences the availability of resources for implementing this growth strategy. The generic competitive strategy of differentiation ensures that these new products are unique. Also, Netflix’s competitive strategy of cost leadership determines the cost structure and limits for these new products’ competitive advantage based on low costs that translate to affordability.

  • Gómez, R., & Munoz Larroa, A. (2023). Netflix in Mexico: An example of the tech giant’s transnational business strategies. Television & New Media, 24 (1), 88-105.
  • Iordache, C., Raats, T., & Mombaerts, S. (2023). The Netflix Original documentary, explained: Global investment patterns in documentary films and series. Studies in Documentary Film, 17 (2), 151-171.
  • Leppänen, P., George, G., & Alexy, O. (2023). When do novel business models lead to high performance? A configurational approach to value drivers, competitive strategy, and firm environment. Academy of Management Journal, 66 (1), 164-194.
  • Netflix, Inc. – Form 10-K .
  • Netflix, Inc. – Long Term View .
  • Netflix, Inc. – Top Investor Questions .
  • U.S. Department of Commerce – International Trade Administration – Media and Entertainment Industry .
  • Copyright by Panmore Institute - All rights reserved.
  • This article may not be reproduced, distributed, or mirrored without written permission from Panmore Institute and its author/s.
  • Educators, Researchers, and Students: You are permitted to quote or paraphrase parts of this article (not the entire article) for educational or research purposes, as long as the article is properly cited and referenced together with its URL/link.


The Leading Source of Insights On Business Model Strategy & Tech Business Models

Netflix Business Strategy

Netflix’s business strategy revolves around content acquisition, including licensing agreements and original production, coupled with a personalized user experience and global expansion. They leverage advanced streaming technology, cloud infrastructure, and data analytics to optimize content delivery. Their strategy focuses on offering a wide variety of high-quality entertainment to a global audience through a user-friendly platform.

Netflix operates on a subscription-based model, providing unlimited streaming access to a vast library of movies, TV shows, and original content for a monthly fee. Customers can choose from various subscription plans offering different levels of access.Netflix offers three main subscription plans: Basic, Standard, and Premium, each with different price points and features, such as the number of screens and streaming quality.– Predictable and recurring revenue streams. – Encourages customer loyalty and retention. – Allows for content investment and production.Subscription-based streaming is at the core of Netflix’s business, with a focus on expanding its global subscriber base, optimizing pricing, and offering various plans to cater to different customer needs.
Netflix heavily invests in producing original content, including TV series, films, documentaries, and stand-up comedy specials. The company aims to create a diverse and appealing library of exclusive content to differentiate itself and attract subscribers.Netflix produces acclaimed original series like “Stranger Things” and films like “The Irishman.” The company also collaborates with high-profile creators, such as Shonda Rhimes and Ryan Murphy, to create exclusive content.– Builds a competitive advantage and exclusivity. – Reduces reliance on third-party content licenses. – Attracts and retains subscribers.Original content production is fully integrated into Netflix’s strategy, with significant investments in content creation, talent partnerships, and a data-driven approach to identifying audience preferences and trends for new content development.
Netflix leverages data analytics and algorithms to personalize the user experience. It provides tailored content recommendations based on user viewing history, preferences, and behavior. This personalization enhances user engagement and encourages content discovery.Netflix’s recommendation system analyzes user interactions and viewing habits to suggest content in various categories like “Because You Watched” and “Top Picks for You.”– Enhances user satisfaction and engagement. – Increases content consumption and retention. – Supports content acquisition decisions.Data-driven personalization is deeply integrated into Netflix’s platform, with ongoing improvements to its recommendation algorithms, content tagging, and user interfaces to optimize content discovery and user engagement.
Netflix aggressively pursues global expansion to reach audiences worldwide. The company invests in localization efforts, including dubbing and subtitles, to make content accessible to international markets.Netflix is available in over 190 countries, with content in multiple languages and subtitles. The company invests in local content production and partnerships to cater to diverse audiences globally.– Expands market reach and revenue potential. – Encourages content localization and diversity. – Mitigates the risk of regional economic fluctuations.Global expansion is a fundamental part of Netflix’s growth strategy, involving partnerships with local telecom providers, compliance with international regulations, and understanding cultural preferences to adapt content offerings.
In addition to original content, Netflix licenses content from third-party studios and networks. This allows Netflix to offer a wide range of content, including popular TV shows and movies, to its subscribers. Licensing agreements vary in duration and terms.Netflix licenses content from major studios like Warner Bros., Disney, and Universal, as well as independent producers. Popular shows like “Friends” and “The Office” were available through licensing agreements.– Provides a diverse and extensive content library. – Accesses popular titles and franchises. – Allows flexibility in content offerings.Content licensing is integrated into Netflix’s content acquisition strategy, with a focus on securing rights to desirable titles, negotiating terms, and managing the content library efficiently.
Netflix offers an ad-free streaming experience to its subscribers. Unlike traditional TV networks, which rely on advertising revenue, Netflix’s revenue comes primarily from subscriptions. This approach aims to provide uninterrupted content consumption.Netflix does not show advertisements or commercials to its subscribers during streaming.– Differentiates from ad-supported competitors. – Enhances user experience and satisfaction. – Encourages subscriptions as the primary revenue source.The ad-free experience is central to Netflix’s value proposition and business model, with no plans to introduce advertising interruptions. The focus is on improving content discovery and personalization to keep subscribers engaged and satisfied.

More on Netflix Business Model

Netflix Business Model






Platform Expansion Theory


Netflix SWOT Analysis


Is Netflix Profitable


Who Owns Netflix?


Netflix Employees


Netflix Subscribers


Netflix Revenue


Netflix Yearly Average Revenue

Netflix Average Yearly Revenue Per Subscriber

Netflix Average Monthly Revenue Breakdown

Netflix Average Monthly Revenue Per Subscriber Per Region

Netflix Revenue By Country

Netflix Revenue By Country

Netflix Subscribers Per Region


Disney vs. Netflix


Read Also: Netflix Business Model , Netflix Content Strategy , Netflix SWOT Analysis , Coopetition , Is Netflix Profitable .

More Resources


About The Author

' src=

Gennaro Cuofano

Discover more from fourweekmba.

Subscribe now to keep reading and get access to the full archive.

Type your email…

Continue reading

  • Specialists

Third Bridge Pride Logo

Netflix – Growth Strategy & Q4 2022 Business Update

  • Public Equity
  • North America
  • Published: November 2022

The first and second quarters of 2022 – the start of the inflationary period – were “shaky” for Netflix, but also a time for the company to reevaluate its spending and strategic goals, a former executive at Netflix Inc told Third Bridge Forum. 

We heard advertising will be a major growth catalyst going forward for the streaming giant, which has also shifted its focus to content quality over quantity, and driving acquisition, retention and engagement.

The specialist said they are confident that Netflix will achieve its goal of 4.5 million subscribers added for Q4 2022 given the launch of its advertising video on-demand (AVOD) plan. With the AVOD launch, the expert believes Netflix should be able to generate at least USD 3 of ARPU on the low end and potentially USD 5-6 on the high end, depending on its foray into live sports.

As for the company’s target of 40 million global viewers by Q3 2023, the “wild card” is the US, we were told. “They’re so highly penetrated here domestically, if they’re not able to increase the TAM with this new AVOD plan, that 40m is going to be pretty hard to achieve in Q3 of 2023.” 

The expert also noted that since Netflix lost subscribers in Q1 and Q2, subscription video on-demand (SVOD) is being measured in revenue terms. “I think that change is forcing a lot of the competitors in the space to really evaluate cost, to really evaluate the content span.” They said Netflix has an advantage because it will be “cash flow positive in 2023”, potentially achieving a margin of 20-23%. “They are just in a much different place than their competitors,” the expert said.

We also heard that gaming could be a significant opportunity for Netflix, with the expert saying that it only needs “one hit”, which, if tied to IP, could be powerful from an engagement and retention perspective.

And industry consolidation could soon be on the horizon, as the expert believes seven players is too many in what is an increasingly crowded market. They remarked that studies suggest that three is the magic number for SVOD subscriptions and ranked Netflix number one, followed by Disney. “Then there are four or five other players vying for that third spot,” they said.

Click here to access all the human insights in the Third Bridge Forum Interview, “Netflix – Growth Strategy & Q4 2022 Business Update”.

Related Transcripts

Netflix – growth strategy & q4 2022 business update, share this page.

The information used in compiling this document has been obtained by Third Bridge from experts participating in Forum Interviews. Third Bridge does not warrant the accuracy of the information and has not independently verified it. It should not be regarded as a trade recommendation or form the basis of any investment decision.

For any enquiries, please contact [email protected]

Additional Content

Streaming platforms – q3 2023 update, ai chips – trends, supply chain & geopolitics, adobe – figma acquisition and generative ai, travel software – amadeus it group & sabre corp, ai trends for us equity investors, streaming platforms – q2 2023 industry update – netflix, disney, amazon, warner bros discovery & others, cloudflare – competitive positioning across cdn, security & compute, microsoft – 2022 hardware update & 2023 outlook.

Third Bridge

For more information about our integrated research solutions and how Third Bridge can help you make smarter and faster investment decisions, please contact us.

netflix strategic plan for future growth

  • Los Angeles
  • Compliance Policies
  • Privacy Policy
  • Modern Slavery & Human Trafficking Statement
  • Gender Pay Gap

More From Forbes

Rising margins and ad growth to drive netflix’s q2 results but stock is expensive at $670.

  • Share to Facebook
  • Share to Twitter
  • Share to Linkedin

This illustration picture taken on April 21, 2018 in Paris shows the logo of the Netflix ... [+] entertainment company, displayed on a tablet screen with a remote control in front of it. (Photo by Lionel BONAVENTURE / AFP) (Photo credit should read LIONEL BONAVENTURE/AFP via Getty Images)

Netflix stock has had a pretty good year, rising by almost 38% year-to-date as the company successfully navigated a brief subscriber decline post-Covid-19. This compares to rival Disney , which has gained about 8% over the same time frame. Netflix is poised to report its Q2 fiscal year 2024 results on July 18, a quarter that is likely to see the company continue to expand its customer base led by its ad-supported plans and crack down on password sharing. We expect earnings to come in at about $4.75 per share, marginally ahead of consensus estimates, while revenues are likely to come in at about $9.60 billion, slightly ahead of consensus estimates, rising 16.5% compared to the last year. See our analysis of Netflix earnings preview for a closer look at what to expect from Netflix earnings.

Netflix net additions are to be sequentially lower in Q2 on account of typical seasonality. However, the company should continue to benefit from its ad-supported tier which is enabling it to attract more price-sensitive customers with a price of just $7 per month in the U.S. This tier had a total of 40 million users as of mid-May 2024, up from about 23 million in January and Netflix has indicated that the ad-supported services represented about 40% of all its signups in the last quarter in markets where they are offered. Moreover, the ad-supported plan is expected to generate more revenue per user than some of Netflix’s ad-free plans as incremental ad revenue more than offsets the discount offered on the ad tier. Over Q1, Netflix said that average revenue per membership rose to 1% year over year and by about 4% adjusted for foreign exchange effects. Netflix has indicated that the metric is poised to rise over Q2 as well as adjusted for foreign currency. Separately, Netflix’s crackdown on password sharing is also likely to help drive up its subscriber numbers to an extent.

Netflix has been increasingly focusing on boosting its margins. For Q2, operating margins are guided at 26.6%, marking an increase from 22.3% in the year-ago quarter. Growth is being driven as revenue growth outpaces operating costs due to economies of scale and also potentially lower content spending growth. Netflix’s continued price increases are also likely helping profitability. That said, margins are likely to trend slightly lower on a sequential basis.

Now NFLX stock has shown strong gains of 25% from levels of $540 in early January 2021 to around $675 now, vs. an increase of about 45% for the S&P 500 over this roughly 3-year period. However, the increase in NFLX stock has been far from consistent. Returns for the stock were 11% in 2021, -51% in 2022, and 65% in 2023. In comparison, returns for the S&P 500 have been 27% in 2021, -19% in 2022, and 24% in 2023 - indicating that NFLX underperformed the S&P in 2021 and 2022. In fact, consistently beating the S&P 500 - in good times and bad - has been difficult over recent years for individual stocks; for other heavyweights in the Communication Services sector including GOOG, META, and TMUS, and even for the megacap stars TSLA, MSFT, and AMZN.

In contrast, the Trefis High Quality Portfolio , with a collection of 30 stocks, has outperformed the S&P 500 each year over the same period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride as evident in HQ Portfolio performance metrics . Given the current uncertain macroeconomic environment with high oil prices and elevated interest rates, could NFLX face a similar situation as it did in 2021 and 2022 and underperform the S&P over the next 12 months - or will it see a strong jump?

Best Tax Software Of 2022

Best tax software for the self-employed of 2022, income tax calculator: estimate your taxes.

Although we think that Netflix stock could move slightly higher if it beats earnings, we believe the stock is overvalued. At the current market price of about $674 per share, Netflix trades at almost 40x forward earnings, which is a bit pricey in our view. While Netflix’s recent performance has been strong, consumer spending growth appears to be slowing down, with the metric rising by about 0.2% in April after a rise of about 0.7% in March. Moreover, the unemployment rate in the U.S. has also seen a bit of an uptick coming in at 4% in May, up from 3.9% in April. These trends could weigh on players such as Netflix who are dependent on strong consumer confidence. Netflix could also see subscriber growth cool, as the impact of its accelerated subscriber ads coming from the twin impact of the password-sharing crackdown and ad-supported tiers is likely to eventually normalize, reducing momentum for the stock. We have a $528 price estimate for Netflix, which is about 22% below the market price. See our analysis Netflix Valuation : Expensive or Cheap for more details on what’s driving our price estimate for Netflix. Also, check out the analysis of Netflix Revenue for more details on how Netflix revenues are trending.

NFLX Return Compared with Trefis Reinforced Value Portfolio

Invest with Trefis Market Beating Portfolios

See all Trefis Price Estimates

Trefis Team

  • Editorial Standards
  • Reprints & Permissions

Join The Conversation

One Community. Many Voices. Create a free account to share your thoughts. 

Forbes Community Guidelines

Our community is about connecting people through open and thoughtful conversations. We want our readers to share their views and exchange ideas and facts in a safe space.

In order to do so, please follow the posting rules in our site's  Terms of Service.   We've summarized some of those key rules below. Simply put, keep it civil.

Your post will be rejected if we notice that it seems to contain:

  • False or intentionally out-of-context or misleading information
  • Insults, profanity, incoherent, obscene or inflammatory language or threats of any kind
  • Attacks on the identity of other commenters or the article's author
  • Content that otherwise violates our site's  terms.

User accounts will be blocked if we notice or believe that users are engaged in:

  • Continuous attempts to re-post comments that have been previously moderated/rejected
  • Racist, sexist, homophobic or other discriminatory comments
  • Attempts or tactics that put the site security at risk
  • Actions that otherwise violate our site's  terms.

So, how can you be a power user?

  • Stay on topic and share your insights
  • Feel free to be clear and thoughtful to get your point across
  • ‘Like’ or ‘Dislike’ to show your point of view.
  • Protect your community.
  • Use the report tool to alert us when someone breaks the rules.

Thanks for reading our community guidelines. Please read the full list of posting rules found in our site's  Terms of Service.

Rancord Society

  • Privacy Policy

Netflix SWOT Analysis (Internal & External Strategic Factors)

Netflix SWOT Analysis, Strengths, Weaknesses, Opportunities, Threats, competencies, competitive advantages, movie streaming business strategic management case

Netflix Inc.’s growth and success are attributable to business strengths and competitive advantages that enable global expansion and market dominance. The net competitive advantages are among the net outcomes of the company’s SWOT factors. In the SWOT analysis framework, the strengths, weaknesses, opportunities, and threats are a reflection of the movie streaming organization’s internal situation (internal analysis) and external environment (external analysis). In this SWOT analysis of Netflix Inc., the business continues to grow and exploit opportunities, despite the adverse effects of the company’s weaknesses and the threats in the market. This condition compels the online enterprise to develop innovative solutions to strengthen its multinational operations against competitors, especially Amazon , Walmart , Apple , Disney, and Google, as well as HBO and other content producers and related networks. These competitors hinder business development and the achievement of strategic goals in Netflix’s corporate vision and mission statements . Addressing the business factors examined in this SWOT analysis can ensure the on-demand media streaming company’s continuous improvement.

The strategic management issues described in this SWOT analysis indicate that Netflix Inc. needs to continue growing while developing capabilities to protect the business against competition and other threats in the media and entertainment industry. While the online entertainment corporation keeps improving its finances, this SWOT analysis enumerates internal strategic factors and external strategic factors that challenge long-term business growth. In this regard, the identified strengths, weaknesses, opportunities, and threats provide a snapshot of Netflix and its industry position and helps guide strategic decisions.

Netflix’s Strengths and Weaknesses (Internal Analysis)

1. High brand equity of Netflix
2. Large platform of content producers and consumers
3. Capacity for original content creation
1. Imitable business model
2. Dependence on content producers
3. Dependence on Internet service providers
  • This SWOT analysis table is best viewed in HTML5-compatible browsers.

Strengths . One of Netflix Inc.’s major strengths is its high brand equity, which is the business benefit and value associated with the company’s brand, relative to competitors. In this SWOT analysis case, the brand enables the movie streaming company to maintain its popularity and ability to penetrate its current markets. In addition, its large platform of content producers and consumers is a strength that allows Netflix to maximize its operational effectiveness, service attractiveness, and business growth. For example, as the platform’s entertainment content creators increase, the service attracts a larger population of consumers, which in turn attract more producers. This kind of business strength is also seen in other platform-type businesses, such as Spotify Technology and its on-demand music streaming operations. Another of Netflix’s strengths is its capacity for original content creation. This means that the company earns from its original movies and shows, in addition to earnings from streaming operations. The strengths assessed in this SWOT analysis are among the core competencies identifiable through a VRIO/VRIN analysis and value chain analysis of Netflix Inc . The company’s value proposition is achieved by using these strengths in the online streaming value chain. Netflix’s corporate culture also affects how these internal factors influence business performance in content creation and technological innovation, via human resource capabilities.

Weaknesses . Netflix Inc. has an imitable business model, which is an internal strategic factor that weakens the business. For example, competitors can copy the same business model to create a platform for on-demand online media streaming. Dependence on content producers is another weakness examined in this SWOT analysis of Netflix Inc. This internal factor makes the company vulnerable to the effects of producers’ strategies. Moreover, the business depends on Internet service providers (ISPs) that determine customers’ connectivity speed, which is a critical factor influencing customer satisfaction in Netflix’s service. With these internal strategic factors, this SWOT analysis reflects the strategic challenge of making the company less vulnerable, given these weaknesses.

Netflix SWOT framework diagram, strengths, weaknesses, opportunities, threats analysis, movie streaming business strategic management goals illustration

Netflix’s Opportunities and Threats (External Analysis)

1. Growth through expansion of product mix
2. Penetration in new markets
3. Business diversification into other industries or markets
1. Competition and imitation
2. Entertainment media/content piracy
3. Cybercrime

Opportunities . Netflix’s opportunities include growth through product mix expansion. For example, the company can develop new types of entertainment content that can be accessed through its website or mobile apps. Considering the other factors in this SWOT analysis, such an external strategic factor is directly related to Netflix Inc.’s generic strategy for competitive advantage, intensive strategies for growth, and business model . Penetration of new markets is another opportunity in this SWOT analysis, especially because of the on-demand streaming company’s lack of significant presence in countries like China. Netflix’s marketing mix or 4P affects how such market penetration is achieved. Furthermore, the online business has the opportunity to diversity, such as by acquiring a complementary firm that could improve overall strategic positioning and success. In the SWOT analysis framework, this external factor is based on market conditions as well as organizational capacity to diversify, thereby requiring Netflix’s corporate structure ’s adequacy and support.

Threats . Competitors and related business imitation are a strong threat, as can be determined through a Porter’s Five Forces analysis of Netflix Inc. Competition is an external strategic factor that, in this SWOT analysis, is an obstacle toward maximizing the company’s revenues and profitability in the online streaming industry. In addition, piracy threatens Netflix by allowing customers to consume pirated content instead of the ones available through the company’s service. In the SWOT analysis model, this external factor intensifies competition for customers’ viewing time. Moreover, considering the resource-based view, cybercrime is a threat based on the information technologies that Netflix uses. Proprietary and sensitive customer information may be compromised as a result of this external strategic factor in the online streaming industry environment. This SWOT framework application highlights cybercrime, which is a technological trend that shapes the industry, as can be assessed through a PESTEL analysis of Netflix Inc.

Key Points – SWOT Analysis of Netflix Inc.

The internal factors in this SWOT analysis of Netflix Inc. indicate that the company is capable of growing in spite of its weaknesses. However, the corporation’s weaknesses present barriers to global success, considering that many firms, including content producers, have the capacity to imitate the company’s movie streaming business model. Still, the Netflix’s brand and other strengths and competitive advantages empower the business to keep growing despite strategic challenges.

On the other hand, the external factors provide a glimpse of Netflix’s business environment and how on-demand digital content distribution companies, customers, and other variables influence each other. The global industry’s dependence on online technologies makes these firms experience the threat of cybercrime and related issues. This SWOT analysis describes an industry environment where Netflix’s strategic management continually seeks new solutions to bring the business to higher performance levels, despite competition and other threats. The company’s strategic plans aim to exploit growth opportunities in this industry, where entertainment producers and movie streaming companies aggressively innovate to capture more market share.

  • Gürel, E., & Tat, M. (2017). SWOT analysis: A theoretical review.  Journal of International Social Research ,  10 (51), 994-1006.
  • International Trade Administration of the U.S. Department of Commerce – The Media and Entertainment Industry in the United States .
  • International Trade Administration of the U.S. Department of Commerce – The Software and Information Technology Services Industry in the United States .
  • Namada, J. M. (2018). Organizational learning and competitive advantage. In  Handbook of Research on Knowledge Management for Contemporary Business Environments  (pp. 86-104). IGI Global.
  • Netflix Inc. – Investors – Long-Term View .
  • Netflix Inc.’s Annual Report to the U.S. Securities and Exchange Commission (Form 10-K) .
  • Netflix Inc.’s Website .
  • Phadermrod, B., Crowder, R. M., & Wills, G. B. (2019). Importance-performance analysis based SWOT analysis.  International Journal of Information Management ,  44 , 194-203.

Our web site does not collect personally identifiable information. See Our Privacy Policy .

Forget Netflix: This Stock Is the Next Millionaire Maker

Netflix DACH Content Reception - Berlinale 2024

That said, Netflix may be undergoing a stock split , which is something to keep in mind if you’re looking to invest. Many also consider them over-valued, especially as more and more companies start to break into the streaming industry. One of these companies is Warner Bros. Discovery ( NASDAQ: WBD ), a behemoth formed by the recent merger of two entertainment giants.

Despite facing challenges in the streaming industry, Warner Bros. Discovery’s exceptional content library and smart cost-cutting strategies have positioned the company to become a major disruptor in the entertainment industry. This could create substantial value for shareholders. Despite strong competition, WBD’s unique strengths place it for significant growth, potentially offering handsome rewards for investors amid the ongoing streaming wars.

Let’s take a look at why WBD may be the next big millionaire maker in the streaming industry. 

The Streaming Industry

African American Woman Lying Down On Sofa At Home, Choosing Movie On Internet Streaming Service. Over The Shoulders.

The world of streaming is a battleground ruled by big names like Netflix and Disney+ ( NYSE: DIS ). Netflix has a huge following and is known for its award-winning original shows. Meanwhile, Disney+ has made a big impact with its vast library and strong ties to The Walt Disney Company. Other key players like Hulu and HBO Max (now part of WBD) also pour tons of money into creating and buying content, all in a fierce competition to grab and keep viewers’ attention.

Subscriber churn (the rate at which customers cancel their subscriptions) is a constant, forcing services to constantly update their offerings to justify their ever-climbing price tags. In this environment, risk looms large, but there is also a  huge  potential for success. 

The global streaming market is projected to achieve a 21.5% CAGR by 2030 . But what company will take advantage of this growth? Success hinges on possessing a compelling library and implementing strategic cost-cutting measures to ensure profitability. 

Warner Bros. Discovery’s Content Powerhouse

netflix strategic plan for future growth

Warner Bros. Discovery is stepping into the ring with an impressive content library that can compete with any other company. On the Warner Bros. side, they’ve got top-notch franchises like Harry Potter, DC Comics superheroes (including Batman, Superman, and Wonder Woman), and classic shows like “Friends” and “The Big Bang Theory” that are still raking in revenue through reruns and streaming.

Meanwhile, on the Discovery side, they’ve got a strong lineup of unscripted shows from HGTV, the Food Network, and the Discovery Channel. This mix of scripted and unscripted content covers a wide range of viewer interests, putting WBD in a great position to attract and keep subscribers.

Plus, WBD is constantly bolstering its library with a robust slate of originals. HBO, which is currently under the WBD umbrella, is a powerhouse of critically acclaimed shows like “Succession” and “Game of Thrones.” WBD plans to leverage these shows while creating new originals across genres. 

This commitment to fresh content can potentially drive WBD to new heights, especially if they’re able to out-compete other streaming services in this arena. However, content is just  one  part of the steaming war. The financial realities matter, too. 

Strategic Cost-Cutting and Value Proposition

Secretaries and administrative assistants, except legal, medical, and executive workers | An assistant schedules a meeting on the phone at modern office.

Streaming services are becoming increasingly expensive. Financial sustainability and value  are now just as important as the shows available. WBD recognizes this and is constantly trying to implement strategic cost-cutting measures to help streamline operations and keep their streaming service cheaper than others. 

After the merger, the company took some serious cost-cutting measures, allowing it to continue offering the same content at a lower price. Plus, they’re also reevaluating content licensing deals. There is the potential for WBD to produce more content in-house with the merger, allowing them to potentially save money. 

These cost-cutting initiatives help WBD stay profitable while still offering the same high-quality content. While some streaming services prioritize subscriber growth at any cost, often burning through cash in the process, WBD’s focus on efficiency positions them for long-term financial health.

For investors, this has huge potential as a long-term investment. 

Underestimated Potential and Long-Term Growth

netflix strategic plan for future growth

Despite its strategic cost-cutting measures, some analysts view WBD’s stock price as undervalued. This tends to occur when two large companies merge together, as investors are momentarily turned-off by the proposition of two companies figuring out how to conglomerate. Integrating operations, corporate cultures, and technology platforms can be a complex and time-consuming process!

However, if you ignore these hurdles for a moment, you can take advantage of the lower stock price. 

WBD’s commitment to a strong direct-to-consumer platform, encompassing HBO Max and Discovery+, is a key driver of their future growth strategy. This combined service allows WBD to offer a more diverse content library than many other streaming services, allowing them to provide better value to streamers. 

Potential Risk of Investing in WBD

netflix strategic plan for future growth

Of course, no investment is without risk, and the streaming landscape is particularly risky. WBD faces  many  challenges that could lead to it withering instead of growing:

  • Competition:  The streaming market is fiercely competitive, and WBD isn’t necessarily in a much better condition than Netflix and Disney+. Plus, many other streaming companies have been around for longer, providing them with a larger subscriber base and brand recognition.
  • Subscriber Churn:  Subscribers are quick to cancel their subscriptions. If WBD stops delivering high-quality content, viewers may churn to other services. 
  • Content Licensing Costs:  Securing rights to popular shows and movies can be expensive. WBD will need to manage these costs effectively to maintain profitability.
  • Merger Challenges:  Successfully operating after a merger can be challenging and complicated. Unforeseeable difficulties can impact WBD’s performance. In fact, WBD’s stock has tumbled over the last year . 

These are just some of the potential difficulties. There are plenty of other potential risks you could bring up! Be sure you consider your risk tolerance when deciding whether or not to invest in  any  streaming company, as they all tend to be a bit risky!

Take This Retirement Quiz To Get Matched With An Advisor Now (Sponsored)

Are you ready for retirement? Planning for retirement can be overwhelming, that’s why it could be a good idea to speak to a fiduciary financial advisor about your goals today.

Start by taking this retirement quiz right here from SmartAsset that will match you with up to 3 financial advisors that serve your area and beyond in 5 minutes. Smart Asset is now matching over 50,000 people a month.

Click here now to get started.

Thank you for reading! Have some feedback for us? Contact the 24/7 Wall St. editorial team .

Editors' Picks

netflix strategic plan for future growth

5 Sizzling Cathie Wood ARK Investment Stocks Trade Under $10 and Have Huge...

netflix strategic plan for future growth

4 'Strong Buy' Stocks With Big Upside Potential Have Expected Dividend Hikes...

netflix strategic plan for future growth

Tuesday's Top Wall Street Analyst Upgrades and Downgrades: ConocoPhillips,...

netflix strategic plan for future growth

5 Damaged Dow Jones Industrial Dividend Leaders Have Huge 2024 Comeback...

  • Today's news
  • Reviews and deals
  • Climate change
  • 2024 election
  • Fall allergies
  • Health news
  • Mental health
  • Sexual health
  • Family health
  • So mini ways
  • Unapologetically
  • Buying guides


  • How to Watch
  • My Portfolio
  • Latest News
  • Stock Market
  • Biden Economy
  • Stocks: Most Actives
  • Stocks: Gainers
  • Stocks: Losers
  • Trending Tickers
  • World Indices
  • US Treasury Bonds
  • Top Mutual Funds
  • Highest Open Interest
  • Highest Implied Volatility
  • Stock Comparison
  • Advanced Charts
  • Currency Converter
  • Basic Materials
  • Communication Services
  • Consumer Cyclical
  • Consumer Defensive
  • Financial Services
  • Industrials
  • Real Estate
  • Mutual Funds
  • Credit Cards
  • Balance Transfer Cards
  • Cash-back Cards
  • Rewards Cards
  • Travel Cards
  • Credit Card Offers
  • Best Free Checking
  • Student Loans
  • Personal Loans
  • Car Insurance
  • Mortgage Refinancing
  • Mortgage Calculator
  • Morning Brief
  • Market Domination
  • Market Domination Overtime
  • Asking for a Trend
  • Opening Bid
  • Stocks in Translation
  • Lead This Way
  • Good Buy or Goodbye?
  • Financial Freestyle
  • Fantasy football
  • Pro Pick 'Em
  • College Pick 'Em
  • Fantasy baseball
  • Fantasy hockey
  • Fantasy basketball
  • Download the app
  • Daily fantasy
  • Scores and schedules
  • GameChannel
  • World Baseball Classic
  • Premier League
  • CONCACAF League
  • Champions League
  • Motorsports
  • Horse racing
  • Newsletters

New on Yahoo

  • Privacy Dashboard

Yahoo Finance

Hisense unveils strategic growth plans for middle east and africa.

Hisense Group Chairman Visits Dubai to Outline Growth Strategy in the Middle East and Africa

DUBAI , UAE , July 10, 2024 /PRNewswire/ -- Hisense, the global home appliance and consumer electronics brand, has reinforced its dedication to the Middle East and Africa (MEA) region with a focus on future growth. This commitment is evident through the strategic investments and expansion plans outlined by Hisense Group Chairman, Jia Shaoqian , during his recent visit to Dubai , UAE.

During his visit, he conducted a roundtable meeting with the leadership of Hisense's key business partners in the MEA region, shared his future vision, and discussed the strategic growth plan for the region. Under the leadership of Jason Ou , President of Hisense MEA, the company is charting a clear course for initiatives and plans, ensuring a strengthened market presence and the delivery of superior products and services to customers across the region.

Significant Market Growth and Expansion Plans

Hisense has experienced exceptional growth in the MEA region, with business revenue doubling since 2019 and brand equity increasing by over 120% during the same period.

" Hisense is committed to bringing groundbreaking technology and high-tech innovation to households in the Middle East and Africa to uplift consumers' lives. Our growth in this region is a testament to our commitment, and we are excited to continue building on this success ," said Jia Shaoqian, Hisense Group Chairman.

He continued, " Hisense is at a critical growth phase in its lifecycle, and soon we will become a leading global force within the industry. To accelerate this, we are expanding our core business foundations such as investment in technology innovation, R&D centers, expansion of global production bases, global brand-building sponsorship initiatives, enhancing our service network, and amplifying efficiencies in supply chain and logistics ."

Strengthening Partnerships and Collaboration

" With the diversity and dynamic environment in the widely spread MEA region, working closely with our partners in the Middle East and Africa is key to our success. This collaboration allows us to develop local strategies that leverage their expertise and market knowledge. Our goal is to create outstanding experiences and strengthen our connection with both partners and consumers in this vibrant region, " said Jason Ou , President of Hisense MEA.

Local R&D and Production Initiatives

Further demonstrating its commitment to the region, Hisense leverages its existing state-of-the-art R&D center strategically located in Dubai Media City. This center plays a crucial role in product development tailored to the specific needs and preferences of MEA consumers. To ensure efficient distribution and meet surging demand across North Africa and the Levant, Hisense plans to establish new production facilities in the region, starting with Egypt , with the launch scheduled for late 2024. These facilities will not only streamline logistics and expedite deliveries, but also create local jobs and contribute to the economic growth of the region. This investment in local production highlights Hisense's long-term commitment to the regional market and its vision of enhancing lives through technology.

Enhancing Consumer Experience and Market Share

Hisense's strategic initiatives in the Middle East and Africa are designed to strengthen the connection between the brand and its customers, creating meaningful and exceptional experiences. By investing in local R&D and production, enhancing partnerships, and leveraging advanced technology and innovations, Hisense is poised to increase its market share and solidify its position as a leader in the region's home appliance and consumer electronics market.

About Hisense

Hisense, established in 1969, is a global home appliance and consumer electronics brand operating in over 160 countries. Specialising in multimedia, home appliances, and IT solutions, Hisense prioritises integrity, innovation, and sustainability.

With over 50 years of expertise, Hisense offers top-quality products, exceptional after-sales services, and extensive warranties. The company pioneers cutting-edge technologies such as the Laser TV, ULED Local Dimming Backlight Control and chip technology, developing 8K ultra high-definition display chips, TV SoC chips, and AI chips. Beyond consumer electronics, Hisense excels in B2B industries such as intelligent transportation, medical technology, and optical modules.

Hisense proudly owns and has acquired renowned brands, including Toshiba TV, gorenje, Kelon, Ronshen, and ASKO, solidifying its position in the market. As a sponsor of major sporting events, Hisense has been associated with events such as FIFA World Cup Qatar 2022™, UEFA EURO 2020™ and UEFA EURO 2024™, and clubs such as Paris Saint-Germain.

With 34 industrial parks, 26 R&D centres and 66 overseas companies, Hisense continues to lead the industry with a diverse range of products. With regional headquarters in Dubai , UAE, and 5 offices across the MENA region, Hisense ensures efficient manufacturing, innovation, and distribution, to meet the evolving needs of consumers in the market. Stay updated with all the latest developments on the website:  https://hisenseme.com/

Photo - https://mma.prnewswire.com/media/2458156/Hisense_Middle_East.jpg

View original content to download multimedia: https://www.prnewswire.com/news-releases/hisense-unveils-strategic-growth-plans-for-middle-east-and-africa-302193438.html

SOURCE Hisense Middle East

We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here . By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service .

Zacks Investment Research Home

New to Zacks? Get started here.

Member Sign In

Don't Know Your Password?


  • Zacks #1 Rank
  • Zacks Industry Rank
  • Zacks Sector Rank
  • Equity Research
  • Mutual Funds
  • Mutual Fund Screener
  • ETF Screener
  • Earnings Calendar
  • Earnings Releases
  • Earnings ESP
  • Earnings ESP Filter
  • Stock Screener
  • Premium Screens
  • Basic Screens
  • Thematic Screens
  • Research Wizard
  • Personal Finance
  • Money Management
  • Retirement Planning
  • Tax Information
  • My Portfolio
  • Create Portfolio
  • Style Scores
  • Testimonials
  • Zacks.com Tutorial

Services Overview

  • Zacks Ultimate
  • Zacks Investor Collection
  • Zacks Premium

Investor Services

  • ETF Investor
  • Home Run Investor
  • Income Investor
  • Stocks Under $10
  • Value Investor
  • Top 10 Stocks

Other Services

  • Method for Trading
  • Zacks Confidential

Trading Services

  • Black Box Trader
  • Counterstrike
  • Headline Trader
  • Insider Trader
  • Large-Cap Trader
  • Options Trader
  • Short Sell List
  • Surprise Trader
  • Alternative Energy

Zacks Investment Research Home

You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.

If you wish to go to ZacksTrade, click OK . If you do not, click Cancel.

netflix strategic plan for future growth

Image: Bigstock

Williams-Sonoma Rises 41% YTD: Should You Buy WSM Stock Now?

Williams-Sonoma, Inc. ( WSM Quick Quote WSM - Free Report ) has gained 41.4% year to date (YTD), comfortably outperforming the Zacks Retail - Home Furnishings industry’s 2.2% growth and the Zacks Retail-Wholesale sector’s increase of 13.1%. It has also fared well than the S&P 500’s rise of 17.5%. This multi-channel specialty retailer of premium quality home products has also broadly outperformed its peer companies like RH ( RH Quick Quote RH - Free Report ) , down 16.9% YTD), Haverty Furniture Companies, Inc. ( HVT Quick Quote HVT - Free Report ) , down 32.4%) and Ethan Allen Interiors Inc. ( ETD Quick Quote ETD - Free Report ) , down 15.3%). Williams-Sonoma is reaping the rewards of its strategic focus on diversifying its product portfolio and establishing a sustainable operating model with the competitive advantage of a digital-first but not digital-only channel strategy. With a robust e-commerce platform and a thriving Business-to-Business (B2B) division, the company is poised for significant growth. Its brands boast a wider array of unique products, including numerous exclusives and collaborations. Benefiting from these favorable conditions, the company is expanding its global presence and reaching new heights of growth, despite persistent challenges in consumer spending.

Zacks Investment Research

What’s Driving Williams-Sonoma?

E-Commerce Platform : The technological evolution has fundamentally altered the retail industry's dynamics, with the e-commerce boom profoundly impacting business models. Williams-Sonoma has emerged as one of the United States' leading e-commerce retailers, consistently maintaining its status as one of the most profitable enterprises in the sector. From a long-term perspective, Williams-Sonoma envisions a continued industry shift from traditional retail to online platforms. E-commerce penetration has been steadily increasing, bolstered by the company's in-house tech platform, a rapid experimentation program, content-rich online experiences, and effective marketing strategies. Currently, Williams-Sonoma's e-commerce penetration is approximately 66%, with expectations for this figure to gradually rise to 70% over time. For 2024, the company's capital allocation plans focus on funding its business operations and investing in long-term growth. Williams-Sonoma plans to spend $225 million in capital expenditures to support its long-term growth, with 75% of this investment dedicated to enhancing its e-commerce leadership and supply chain efficiency. This underscores the digital-first nature of the company's business strategy. Competitive Edge : Williams-Sonoma stands out in the highly competitive specialty e-commerce and retail market. The company’s strength lies in its brand authority, superior merchandise quality, robust e-commerce platforms and strategic marketing capabilities. The company’s in-house design teams and talented suppliers bring high-quality, sustainable products to market, supported by a high-touch multi-channel platform. The company leverages world-class customer analytics and first-party data to optimize digital marketing, driving sales and acquiring new customers. WSM’s investment in proprietary e-commerce technology and AI leadership solidifies its position as an industry leader. Focus on B2B : Williams-Sonoma's effective B2B strategy enables it to capture a significant market share in the fragmented home furnishings industry. Operating in two formats, trade and contract, the B2B segment achieved remarkable growth in the first quarter of fiscal 2024, expanding 10% year over year and driving record-breaking demand. The trade business grew 6%, while the contract business, which accounts for about one-third of the B2B segment, surged 18% year over year. This success is attributed to its diverse clientele, ranging from supplying sofas for UC San Diego dorms to corporate gifting for Pebble Beach Company. Additionally, the company saw continued growth from major project clients such as Marriott, Dave & Buster's, and Jamestown Properties. Focused on accelerating its contract business, Williams-Sonoma is experiencing positive momentum in this less housing- and consumer trend-dependent segment. Significant wins in the hospitality, sports, and entertainment verticals highlight its strategic importance and potential for future growth. Leveraging its strong brands, design expertise, global sourcing capabilities, and efficient delivery system, Williams-Sonoma is optimistic about its long-term prospects and recent improvements in the B2B market. Strategic Efforts & Innovations : Williams-Sonoma is well-positioned for growth, driven by the strength of its brands, strategic efforts, and innovative merchandising initiatives. Despite some challenges, key brands under the WSM umbrella are demonstrating resilience and potential for expansion. Meanwhile, while international sales faced macroeconomic headwinds, bright spots were noted in India, Mexico, and Canada. Looking ahead, Williams-Sonoma is focused on improving West Elm’s merchandising and driving growth. The brand is emphasizing new product introductions and collaborations and maintaining stock on modern aesthetics. Williams-Sonoma is also excited about exclusive products like the new navy Jura espresso machine and impactful collaborations, including the recent one with Netflix's Bridgerton. Pottery Barn Kids/Teen will continue to focus on collaborations, baby products, and dorm assortments while Pottery Barn prepares for fall and holiday updates with new collaborations. Williams-Sonoma’s strategic focus on brand strength, innovative merchandising, and impactful collaborations positions it well for sustained growth in the competitive retail landscape.

WSM Trading Below 50-Day Moving Average

WSM shares are trading well below the 50-day moving average, broadly because of the softness in the retail sales. Furniture sales were down 1.1% in May from April 2024 and down 6.8% year over year. As of Jul 8, the stock closed at $285.18, which is below its 52-week high of $348.51 but much higher than its 52-week low of $120.74.

WSM Price Movement vs 50-Day Moving Average

Zacks Investment Research

A sluggish housing market and a slowdown in consumer spending continue to pose significant challenges. Rising inflation and higher interest rates are straining consumer resilience, leading households to prioritize essential purchases while reducing discretionary spending.

Meanwhile, Williams-Sonoma’s margins have benefited from lower ocean freight costs, supply chain efficiencies, and reduced promotional activity, but these advantages are now waning. The company's 2024 guidance suggests flat operating margins from the second to the fourth quarter of the current fiscal year. Some gross margin benefits may persist, likely reinvesting in advertising. Yet, higher incentive compensation expenses are anticipated. Williams-Sonoma is a stronger operator post-pandemic, with a sustainable operating model poised for profitable growth. The brand's differentiated products, exclusives, and collaborations drive revenue based on product value rather than promotions.

Estimates Revision Trend

The Zacks Consensus Estimate for fiscal 2024 EPS has increased 5.3% and 4% for the next year over the past 60 days. The positive estimate revision depicts optimism about the stock’s growth potential. The estimated figure indicates 8.3% and 4.1% year-over-year growth for fiscal 2024 and 2025, respectively.  

Zacks Investment Research

Solid Financial Position

Williams-Sonoma ended the fiscal first quarter with $1.3 billion in cash and no debt. Since the second quarter of fiscal 2023-end, Williams-Sonoma has maintained a debt-free, strong financial position. This allowed the company to invest $40 million in capital expenditures and return $107 million to shareholders through share repurchases and dividends in the first quarter of fiscal 2024. In March, Williams-Sonoma announced a 26% increase in its quarterly dividend payout to $1.13 per share, marking the 15th consecutive year of increased dividend payouts. Additionally, the company has $956 million remaining under its $1 billion share repurchase authorization, which will be used to opportunistically buy back stock and deliver returns to shareholders. Check WSM’s dividend history here .

WSM Trading at a Premium

The company is currently valued at a premium compared to its industry on a forward 12-month P/E basis.  

Zacks Investment Research

WSM’s trailing 12-month Return on Equity (ROE) is indicative of its growth potential. ROE for the trailing 12 months is 54.5%, much higher than the industry’s 41.6%, indicating the company’s efficient usage of shareholders’ funds.

Zacks Investment Research

Investment Thoughts

Dwindling consumer confidence, housing market fluctuations and economic uncertainty are indeed potential risks for WSM. Along with these risk factors, the company’s flat operating margin expectation and premium valuation are concerns. Despite its premium valuation, the stock remains compelling for investors. Williams-Sonoma’s leadership in e-commerce, resilient operating model, supply-chain efficiencies, focus on B2B segment and expansion plans, solid balance sheet, and commitment to return cash to shareholders are likely to mitigate downside risks. Given the above-mentioned tailwinds and strong returns, investors may consider adding this Zacks Rank #1 (Strong Buy) stock to their portfolio. You can see the complete list of today’s Zacks #1 Rank stocks here .

Unique Zacks Analysis of Your Chosen Ticker

Pick one free report - opportunity may be withdrawn at any time.

Williams-Sonoma, Inc. (WSM) - $25 value - yours FREE >>

RH (RH) - $25 value - yours FREE >>

Haverty Furniture Companies, Inc. (HVT) - $25 value - yours FREE >>

Ethan Allen Interiors Inc. (ETD) - $25 value - yours FREE >>

Published in

This file is used for Yahoo remarketing pixel add

netflix strategic plan for future growth

Due to inactivity, you will be signed out in approximately:

You're reading a free article with opinions that may differ from The Motley Fool's Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Warning: Does This 1 Change Mean Trouble for Netflix Investors?

  • Starting in 2025, management will no longer provide quarterly subscriber numbers.
  • The leadership team thinks other metrics should be used to assess the health of the business.
  • Critical investors might think this means much slower member growth going forward.
  • Motley Fool Issues Rare “All In” Buy Alert


Netflix Stock Quote

The streaming giant is changing its reporting standards.

Netflix ( NFLX -3.82% ) is undoubtedly one of the best-performing stocks in the past couple of decades. It has skyrocketed 13,130% since July 2004, on the backs of a successful run at disrupting the media and entertainment landscape.

This top streaming enterprise continues to post stellar financial results, leading to its shares approaching their record high. However, investors looking to scoop up the stock should press pause for a second: Does this one key reporting change mean trouble for investors?

How many subscribers?

After a brief post-pandemic lull, Netflix is firing on all cylinders, thanks to the company's progress at cracking down on password sharing and the successful launch of an ad-supported tier. The membership base was up 16% in Q1 (ended March 31) year over year to nearly 270 million, with revenue rising 14.8% to $9.4 billion.

Profits are also through the roof. Netflix reported operating income of $2.6 billion in the quarter, good for a fantastic margin of 28.1%. This business now generates billions in free cash flow on a yearly basis.

However, executives sent shock waves through the investment community when they said that Netflix would no longer report subscriber numbers starting in 2025. To be fair, though, they did mention that they'd "announce major subscriber milestones" as they hit them.

The management team believes that at this stage of Netflix's life cycle, revenue, operating margin, and engagement are the key performance indicators to gauge the help of the business. Moreover, given the multiple price points and tiers available for consumers, looking at membership figures is not as vital to the story as it once was.

Two different perspectives

On one hand, shareholders can take the leadership team's reasoning at face value. That's an easy perspective to have. Giving Netflix executives the benefit of the doubt seems like the right move, especially since they've built a global media empire whose share price has outperformed the vast majority of stocks. Maybe they're not trying to cover anything up.

Growing revenue and earnings is probably the most important thing that investors want to see. Whether that comes from signing up more members or from occasional price increases might not matter as much these days.

To be clear, I've been bullish on Netflix. And I still believe the business has a bright future. But I tend to lean more on the critical side of this debate.

If the management team were confident that the business could grow its subscriber base at a healthy clip for the foreseeable future, they would gladly want their shareholders to know about it. So this is a reason to worry a bit. Maybe this is a sign that subscriber growth is going to slow dramatically going forward.

That shouldn't be too much of a surprise. Management estimates that there are currently 500 million smart-TV households worldwide (excluding China, where Netflix isn't available). Converting more of these households to Netflix customers won't be as easy as it was historically. There is so much competition out there. Plus, it will simply require Netflix to have a more convincing content offering to expand its user base over time.

It will create a problem for investors, particularly those who need access to membership data to track the company's performance each period. This is especially true when we're talking about a subscription business. I'm sure that when most active fund managers try to value Netflix, figuring out trends with subscribers is a critical component of the analysis. Now they will have to do some guessing.

While I don't believe this automatically spells doom for Netflix, I believe that investors need to pay even closer attention to the other metrics that matter.

Neil Patel and his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Netflix. The Motley Fool has a disclosure policy .

Related Articles

Megaphone and crowd

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.

Skydance CEO Ellison says new Paramount will become a tech-media hybrid

  • Medium Text

U.S. Premiere of Transformers: Rise of the Beasts


Sign up here.

Reporting by Dawn Chmielewski in Los Angeles; Editing by David Gregorio and Muralikumar Anantharaman

Our Standards: The Thomson Reuters Trust Principles. New Tab , opens new tab

Biden, Trump face off in first presidential debate, in Atlanta

Business Chevron

Illustration shows U.S. flag and TikTok logo

TikTok crackdown law: US House seeks to boost DOJ defense 

A U.S. House committee on Thursday voted to release a transcript of a closed-door hearing in March on threats posed by TikTok to the Justice Department in its defense of a law that seeks to force its Chinese owner to divest the popular app's U.S. assets.

U.S. inflation decelerating in boost to economy

an image, when javascript is unavailable

CNN Plans Launch of Digital Subscription Product by End of 2024 Amid Newsroom Layoffs

By Brian Steinberg

Brian Steinberg

Senior TV Editor

  • Veteran Media Critic Brian Lowry to Exit CNN Amid Layoffs 18 hours ago
  • NBA Finalizes Massive Rights Deals With NBC, Amazon, ESPN, Setting Up Possible Warner Showdown 21 hours ago
  • Can Skydance Move the Mountain? Team Ellison Needs a Bold Plan to Revive Paramount’s Fortunes 23 hours ago

Broken CNN

CNN is finally gearing up to compete more aggressively in the digital future, where rivals have already staked out ground.

The Warner Bros. Discovery -backed news outlet will launch a new subscription product on CNN.com before the end of the year, according to a new memo from CNN Chairman and CEO Mark Thompson , and debut two new free ad-supported digital offerings, one based on CNN’s original series and productions, and another based on its Spanish-language service. The moves come amid an overhaul of CNN’s newsroom that will result in the elimination of 100 positions.

Related Stories

Why is bytedance considering a move that burned so many tech giants, 'a quiet place: day one' director explains the ending, what characters are still alive and says a sequel is 'absolutely' happening, popular on variety.

In some ways, the new concepts echo one of CNN’s biggest recent initiatives: The company in 2022 debuted CNN+, a subscription-based streaming hub that executives said represented the best way to capture die-hard viewers with a mix of lifestyle and news programming that relied on personalities including Wolf Blitzer, Kate Bolduan and Kasie Hunt. Within a month of its launch, the service was shut down by CNN’s new parent corporation .

Thompson, who joined CNN as its new leader in 2023 after logging stints at the BBC and New York Times Co., has vowed to push the journalism unit into new digital frontiers, a bet that he can help build new revenue as CNN’s flagship cable network suffers from the defection of traditional TV watchers to streaming. CNN’s subscriber base is projected to fall 5.6% to 66.3 million in 2024 — an election year — according to estimates from Kagan, a market-research unit of S&P Global Intelligence. According to Kagan, CNN ended 2023 with 70.3 million subscribers.

To accomplish his goals, Thompson said in his memo he will reorganize CNN’s newsgathering structure and eliminate about 100 positions — about 2.8% of CNN’s employee base of 3,500. “Our priority throughout this process will be to treat them and every other CNN colleague with the respect, dignity, and the support you all deserve, including severance packages, career counseling and assistance with job placement,” he said.

CNN will break down divisions between U.S.-based and international news teams, as well as those that may exist between digital, text and video production. “Rather than separate tribes of TV and digital, international and domestic, we need to recognize that we are all journalists and storytellers first and foremost,” Thompson said. “We plan to provide more opportunities for everyone to learn new skills and new forms of storytelling, and more chances to move from one part of CNN to another.”

Thompson also laid out some goals for CNN’s TV operations, where he has recently been willing to cut costs. In February, CNN eliminated its regular morning program, “CNN This Morning” in the belief that the production outlays required to compete with MSNBC’s “Morning Joe” and Fox News Channel’s “Fox & Friends,” along with the usual array of broadcast news mainstays, were no longer worth the price. CNN also launched the short-form news program “5 Things,” which has been streaming on Warner’s Max service, and will expand it to CNN.com

But that won’t be enough. Viewership for CNN’s current primetime lineup has sunk to some of the lowest levels in the network’s history. Charlie Moore, a longtime producer for Anderson Cooper, has been assigned to “find ways to further develop and strengthen our domestic primetime offering,” Thompson said.  In a bid to devise new programming concepts, CNN will launch a TV Futures Lab that is charged with developing and managing programming for Max, but also with devising ways “to migrate the linear news experience to other new digital environments,” Thompson said.

More from Variety

‘the exorcism’ review: russell crowe plays a fallen movie star playing a priest in an exorcist movie. is this the sign of a career gone to hell, how roblox is facilitating animated films’ domination of 2024 box office, gaming layoffs already top 2023’s total — and it’s only july, more from our brands, rema’s culture was demonized. now, he’s doubling down with new video ‘benin boys’, silversea celebrates 30 years of luxury travel, power progeny: delany’s son joins fellow commish kids in the family biz, the best loofahs and body scrubbers, according to dermatologists, get 50% off paramount+ with showtime on prime video.


Money blog: Nando's launches a ketchup - so we compared all brands. Which is best value - and which has more water than tomatoes?

Welcome to the Money blog, your place for personal finance and consumer news and tips. Leave a comment or your Money Problem/consumer dispute (don't forget to leave a contact number/email) in the box below.

Thursday 11 July 2024 18:02, UK

  • Widespread issues with card payments reported - as people turned away from supermarkets
  • Nando's launches a ketchup - so we compared all brands. Which is best value - and which has more water than tomatoes?
  • Chances of August interest rate cut recede
  • Water bills to rise by average 21% over next five years, regulator rules

Essential reads

  • We asked beauty experts for their top dupes to give you a summer glow - without breaking the bank
  • Michelin chef reveals £2 supermarket pasta that can elevate your dinners - as he picks his Cheap Eats in London
  • Basically... What are the different ways of paying for a car?
  • Women in Business : From blackouts to CEO - how burnout helped create UK's biggest venue booking platform
  • Best deals on school uniform ahead of new academic year

Ask a question or make a comment

A new competitor has emerged on the condiment shelf - Nando's ketchup.

It's being advertised as a twist on the traditional sauce, with a touch of "peri-peri magic" for your chips, burgers or bolognese.

This translates into a small amount of spices like cayenne pepper, bird's eye chilli, ginger, garlic, and paprika, as well onion and lemon purees.

We've taken a look at how it stacks up against the other ketchups on Asda's shelves below, with some key takeaways:

  • Hellmann's has the most tomatoes and the least calories per serving
  • Asda's own brand is by far the most affordable - with a very similar ingredients list to market leader Heinz
  • Nando's is, just, the most expensive per 100g, though it's tricky to compare against all the below as some are only available in bigger bottles
  • The main ingredient in Leon's, uniquely, is not tomatoes but water
  • Leon's has the least sugar per serving

Price per 100g: 94.3p (for normal sized bottle) Main ingredient: Tomato paste (140g tomatoes per 100g) Calories: 17kcal per serving Sugar per 100g: 20g

Price per 100g: 80p (for normal sized bottle) Main ingredient: Tomatoes (148g per 100g) Calories: 15kcal per serving Sugar per 100g: 22.8g

Asda own brand

Price per 100g: 14.9p (only available in jumbo sized bottle) Main ingredient: Tomatoes (148g per 100g) Calories: 15kcal per serving Sugar per 100g: 21g

Price per 100g: 92.2p (normal sized bottle) Main ingredient: Water (with tomato paste second at 25%) Calories: Not available Sugar per 100g: 16.6g

Price per 100g: 29.2p (one up from normal sized bottle) Main ingredient: Tomatoes (117g per 100g) Calories: 17kcal per serving Sugar per 100g: 22g

Price per 100g: 40p (two up from normal sized bottle) Main ingredient: Tomatoes (168g of tomatoes per 100g) Calories: 13kcal per serving Sugar per 100g: 18g

Asda is the first to offer Nando's tomato sauce but it is expected to roll out at Sainsbury's, Tesco and other supermarkets in the coming months.

People with coeliac disease are paying up to 35% more for their weekly shop, research has found, with some even eating gluten to avoid paying higher costs despite the potential impact on their health.

A new report by Coeliac UK has found that 77% of people with the disease struggle to afford gluten-free products from supermarkets.

Seven in 10 people said shopping gluten free "adversely affects their quality of life" due to the cost and availability of the food on supermarket shelves and online.

Around 4% are choosing to eat gluten despite the risk to their health because of concerns around the cost of gluten-free food, while 27% would eat products with "may contain" for the same reason.

The research by Coeliac UK revealed that loaves of bread are 4.5 times more expensive on average, while pasta and plain flour are twice as pricey when made gluten free.

If you're thinking of stocking up on Sainsbury's snacks and drinks for Sunday's big game, you'd better do it ahead of time.

Like rival Tesco, the supermarket has announced it is closing convenience stores and petrol stations early across England so staff can tune into the Euros final.

More than a thousand branches will be closing at 7.30pm on Sunday, rather than 10pm or 11pm.

"We want to give our colleagues the chance to tune in live and cheer on England with friends and family. The atmosphere in stores is electric after last night's win," said Clodagh Moriarty, chief retail and technology officer.

Supermarket hours are unaffected as they usually close before the 8pm kick-off. 

Any online grocery orders which have already been booked will be honoured.

All branches will reopen at their usual time on Monday.

Earlier this week, business presenter Ian King answered questions from Money blog readers about what the new Labour government means for their personal finances.

One question related to the two-child cap on child benefit - which Labour have at times suggested they're ideologically opposed to, but won't commit to changing because of the cost.

Responding to a question about whether taxes could be raised for oil and gas companies to pay for scrapping the cap, King said: "The Resolution Foundation has estimated that the two-child benefit cap will save the government £2.5bn during the current financial year - which would rise to £3.6bn if applied to all families claiming universal credit.

"Labour is committed to raising the levy on North Sea oil and gas producers from the current 75% to 78% - and has earmarked the money raised will go towards funding its wider plans for energy and, in particular, decarbonisation.

"It would be ill-advised to raise taxes further. The decisions it has made have already had an impact on investment in the North Sea, as I report here.

"And don't forget, the cap is not just about saving money. It's also about avoiding awkward newspaper headlines and stories about big families being paid a small fortune in benefits of the kind that embarrassed the last Labour government and angered so many of its traditional working-class supporters in particular."

You can read all 21 of King's answers here ...

A "nationwide issue" has been affecting card payments.

Many social media users were reporting being unable to pay for their shopping in supermarkets this morning.

More than 600 people were flagging issues with Visa on Down Detector as of 9.45am, while over 100 had problems with Mastercard payments as of 10am.

A sign in one Sainsbury's store was requesting customers pay for their shopping in cash.

The supermarket said on social media it had been aware of a "nationwide issue" with card payments.

Vanessa Meehan, in Twickenham, said: "I've just been turned away at Sainsbury's as they can't accept card payments. Petrol station also coned off. The car is running on fumes and I need to get supplies."

A Sainsbury's spokesperson told Sky News at 11am that contactless payments had resumed after being "briefly unavailable for a few minutes this morning".

They said this was caused by an issue with its third-party payment provider.

"We're accepting all payments as usual and continue to monitor the situation. We're sorry for any inconvenience this may have caused," the supermarket said.

Asda also confirmed its payment systems were back up and running following temporary issues with Visa.

A Visa spokesperson confirmed to Sky News it had been aware cardholders were experiencing issues when making payments.

"While Visa's systems are operating normally, we are working with our partners to investigate," they added.

Mastercard said it was "aware of some payment transaction issues at select merchants in the UK" and was working to gather more information.

"There is no current indication that these issues are related to our network," a spokesperson said.

The UK's biggest supermarket chain has told customers its Express stores across England will close at 7.30pm instead of the usual 10pm or 11pm on Sunday - after England reached the Euro 2024 final.

It said the decision had been taken to allow its staff to get home or to the pub in time for kick-off at 8pm. 

Employees who do not want to watch the match will be paid as normal, it said. 

Stores will be open as normal the following morning. 

England are playing Spain in the final - and will have the chance to become the first England men's team to win a major tournament since the World Cup in 1966. 

By James Sillars , business reporter 

Faltering expectations for imminent interest rate cuts are playing out in financial markets today.

The pound is at a four-month high versus the dollar at $1.28.

That has been largely put down to remarks by Bank of England rate-setter Huw Pill, the Bank's chief economist, that the timing of the UK's first rate cut was an "open question".

He spoke up just 24 hours after another member of the monetary policy committee ruled out personal support for a reduction on 1 August.

Jonathan Haskel said too many stubborn inflationary pressures remained.

As such, financial markets now see only a 50/50 chance of a rate reduction to 5% from 5.25% at the next Bank meeting.

The chance of a cut had stood at 60% at the start of the week.

The pound has lifted as higher interest rates are generally supportive of a domestic currency.

Elsewhere, the FTSE 100 has opened to a flat calm - up just a couple of points at 8,000.

A big focus for investors this morning was the interim decision by water regulator Ofwat on what suppliers could charge their customers over the next five years.

To give you some idea of the reaction, shares in United Utilities and Severn Trent opened up by around 2%. Those of Pennon, the company behind South West Water, were up by more than 6%.

Water companies in England and Wales have been told they will not be allowed to impose the hikes to bills they have demanded, the industry regulator has said in an interim verdict on their business plans for the next five years.

Ofwat declared that it was minded to slash, by a third, the combined increases that the 16 companies had submitted.

It left the average bill, the watchdog said, set to rise by £19 a year or 21% over the period.

Read our report here ...

Meanwhile, more compensation, possible refunds and new customer panels have been announced as part of the government's "initial steps" towards ending what it describes as the crisis in the water sector.

You can read this story here ...

The appearance of finer weather helped the economy recover some lost ground in May, according to official figures that were better than expected.

The Office for National Statistics (ONS) recorded gross domestic product growth of 0.4% in the month, compared with its earlier determination of  zero growth during April .

A poll of economists by Reuters had pointed to a 0.2% increase for monthly gross domestic product in May.

On a quarterly basis, the UK's interest rate-driven recession of the second half of 2023 ended at the start of this year as the  Bank of England  ended its rate hiking cycle which was designed to cool inflation by choking demand in the economy.

Read our full story here ...

A common trick could get your car insurance down by £295.

Motorists aged between 25 and 34 save that figure on average by adding an experienced driver to their policy, Compare the Market has found. 

Even younger drivers aged 18 to 24 - who often face the highest premiums - could also make big savings, an average of £281.

The typical premium for those aged between 18 and 24 is £2,140 - but adding a named driver brings that down by 15% to £1,859. 

You can check how much you could potentially save in the table below...

In order for your policy to be valid though, all named drivers must use the car. 

The cost of car insurance usually declines by adding an experienced driver to the policy, as insurers typically take both motorists' information into consideration when determining the premium, based on the car being shared.

If you add an additional driver and they do not use the vehicle, this can be considered as a type of insurance fraud called fronting. 

If you are caught fronting, your policy could become invalid and you could face criminal prosecution. 

Julie Daniels, motor insurance expert at Compare the Market, said the price of insurance had increased by 19% in the past year. 

Be the first to get Breaking News

Install the Sky News app for free

netflix strategic plan for future growth

We've detected unusual activity from your computer network

To continue, please click the box below to let us know you're not a robot.

Why did this happen?

Please make sure your browser supports JavaScript and cookies and that you are not blocking them from loading. For more information you can review our Terms of Service and Cookie Policy .

For inquiries related to this message please contact our support team and provide the reference ID below.


  1. Netflix Upfront 2024: The Year of Growth and Momentum

    Advertising Growth Amy Reinhard, Netflix's President of Advertising, walked advertisers through the continued growth and momentum of Netflix's ad-supported plan, which now has 40 million global monthly active users — up from 5 million a year ago. Over 40% of all signups in the ads countries now come from the ads plan.

  2. Why Netflix Is Poised For A Dominant 2024 (And Beyond)

    In anticipation of this, Netflix is planning a price increase for 2024. We'll likely see an increase in ARPU during this period. Streaming Market Share (Based on Nielsen Data) Looking at streaming ...

  3. Netflix 2023 Upfront: Building a Forever Business

    Just six months in, Netflix's ad-supported plan has nearly 5M monthly active users globally. On average, more than a quarter of Netflix sign ups now choose the ads plan in countries where it's available. Nearly 80% of ad-supported member's viewing happens through a TV. More than 70% of Netflix ads plan members are aged 18 to 49.

  4. What will Netflix do next?

    The growth years continued, with Netflix going global in 2016, expanding to 190 countries. The company led the market with growing subscription numbers in excess of 100 million and award-winning original content - a strategy it would continue to pursue by producing original content, starting with House of Cards in 2013 and more recently Stranger Things, Lupin and Squid Game.

  5. Decoding Netflix Inc (NFLX): A Strategic SWOT Insight

    Strategic partnerships and technological advancements remain crucial for future growth. On January 26, 2024, Netflix Inc (NASDAQ:NFLX) filed its annual 10-K report, providing a comprehensive ...

  6. What Netflix Will Look Like in 2023

    Netflix's new advertising-supported service will cost less than peers Disney+ and HBO Max. David O. Russell's "Amsterdam" is one of the biggest bombs of the year. It is on pace to lose ...

  7. The Best Way for Netflix to Keep Growing

    Save. Summary. Netflix's model has been undeniably successful to date. However, fighting the blockbuster content-acquisition and creation battle is becoming ever more expensive, and it involves ...

  8. 'Fewer swings but better swings': Netflix sets stage for next phase of

    As Netflix adopts a more strategic approach to driving its content engagement, Wall Street analysts have called out two big drivers of future growth: international content and live sports. Netflix ...

  9. Netflix

    Netflix is available virtually everywhere except in China and Russia. Our growth internationally will unfold over many years as we improve our service. In the 130+ new markets we launched in 2016, we started by primarily targeting outward-looking, affluent consumers with international credit cards and smartphones.

  10. Netflix's Business Strategy Explained

    Netflix's corporate strategy can be summarised in its mission and vision statements: We promise our customers stellar service, our suppliers a valuable partner, our investors the prospects of sustained profitable growth, and our employees the allure of huge impact. 'Netflix Mission Statement'. Becoming the best global entertainment distribution ...

  11. Netflix's Competitive Strategy & Growth Strategies

    Netflix's competitive strategy is cost leadership, which functions as the primary strategy for the company's competitive advantages. According to Porter's model of generic strategies, cost leadership ensures competitive advantage based on low costs that can be used to offer competitive prices to the company's target customers, e.g ...

  12. To Grow Faster, Netflix Must Reinvent Itself Again

    Netflix's Upcoming Earnings Report. On July 15 before the market opened, Netflix stock traded 6% below its all-time high of $593. But over the longer term, it has been doing well. In the decade ...

  13. Revenue Growth Will Be a Key Focus for Netflix in 2024

    Current Price. $685.67. Price as of June 18, 2024, 4:00 p.m. ET. The streaming service giant plans to access higher growth rates by ramping up its advertising business and requiring more account ...

  14. Netflix's Subscriber Growth Is Predicted to Accelerate Through 2025

    Investor fears about Netflix 's (NFLX 0.89%) future subscriber growth are very real. After a monster year in 2020, the company added just 5.5 million members in the first six months of this year.

  15. Netflix

    5. You said the USD 9.99 tier seems most likely to downgrade, but also that Netflix has certainly been thinking about what CPM it could command and how that will play into its ARPU. The number publicised over summer 2022 was that the company might get USD 65 CPM, which is certainly above industry averages. How could the ad tier from a revenue ...

  16. Netflix Business Strategy

    Netflix is a subscription-based business model making money with three simple plans: basic, standard, and premium, giving access to stream series, movies, and shows. Leveraging on a streaming platform, Netflix generated over $33.7 billion in 2023, with an operating income of over $6.95 billion and a net income of over $5.4 billion. Starting in 2013, Netflix started to develop its content under ...

  17. Netflix

    The specialist said they are confident that Netflix will achieve its goal of 4.5 million subscribers added for Q4 2022 given the launch of its advertising video on-demand (AVOD) plan. With the AVOD launch, the expert believes Netflix should be able to generate at least USD 3 of ARPU on the low end and potentially USD 5-6 on the high end ...

  18. Netflix: Ultimate Experience Company

    This is very interesting to me considering Netflix's robust growth rates that significantly outpace the industry average. Netflix's PEG is 1.29 which is currently 5.33% below the sector median ...

  19. Netflix's Generic Strategy, Business Model & Intensive Growth

    Netflix Inc.'s business model aligns with the company's generic strategy for competitive advantage (Porter's model), and intensive growth strategies (Ansoff Matrix). This alignment is seen as a factor in the company's strategic position as a leading competitor in the on-demand digital content streaming industry.

  20. 4 Strategies Netflix Can Implement to Boost Revenue Amid Slowing

    Market Cap. $298B. Today's Change. $690.65. Price as of July 5, 2024, 4:00 p.m. ET. The streaming giant reported subscriber losses for the first time in over a decade. After over a decade of ...

  21. Rising Margins And Ad Growth To Drive Netflix's Q2 Results ...

    Netflix has been increasingly focusing on boosting its margins. For Q2, operating margins are guided at 26.6%, marking an increase from 22.3% in the year-ago quarter.

  22. Netflix SWOT Analysis (Internal & External Strategic Factors)

    The company's strategic plans aim to exploit growth opportunities in this industry, where entertainment producers and movie streaming companies aggressively innovate to capture more market share. References. Gürel, E., & Tat, M. (2017). SWOT analysis: A theoretical review. Journal of International Social Research, 10(51), 994-1006.

  23. Forget Netflix: This Stock Is the Next Millionaire Maker

    For years, Netflix (NASDAQ: NFLX) has been the darling of the entertainment industry. Its stock price has soared as it's revolutionized how we consume movies and TV shows. If you invested $1,000 ...

  24. Hisense Unveils Strategic Growth Plans for Middle East and Africa

    Significant Market Growth and Expansion Plans. Hisense has experienced exceptional growth in the MEA region, with business revenue doubling since 2019 and brand equity increasing by over 120% ...

  25. Williams-Sonoma Rises 41% YTD: Should You Buy WSM Stock Now?

    Williams-Sonoma plans to spend $225 million in capital expenditures to support its long-term growth, with 75% of this investment dedicated to enhancing its e-commerce leadership and supply chain ...

  26. Warning: Does This 1 Change Mean Trouble for Netflix Investors?

    Profits are also through the roof. Netflix reported operating income of $2.6 billion in the quarter, good for a fantastic margin of 28.1%. This business now generates billions in free cash flow on ...

  27. Skydance CEO Ellison says new Paramount will become a tech-media hybrid

    Skydance Media CEO David Ellison sketched out a vision on Monday for Paramount Global as a technology-media hybrid company at a time Hollywood has been competing for attention with tech giants ...

  28. CNN to Launch Digital Subscriptions by End of 2024 Amid Layoffs

    CNN plans to launch a new digital subscription product by the end of 2024 as its chief Mark Thompson pushes the cable network into broadband frontiers.

  29. Money blog: Tesco to close early on Sunday; policy tweak could save you

    By James Sillars, business reporter . Faltering expectations for imminent interest rate cuts are playing out in financial markets today. The pound is at a four-month high versus the dollar at $1.28.

  30. Vietnam's Accelerating 2024 Economic Growth Could Hit 7%

    Vietnam's economic growth is accelerating and could meet or exceed the government's 6.5% target this year, according to Planning and Investment Minister Nguyen Chi Dung.