The Return of a Titan
January 20, 2023
The entertainment industry has grown at an extremely rapid rate within the last century and people are flocking to their TVs more and more. In fact, the average hours watched on TV per day in an American household has increased from a mere 4 hours per day to an astronomical 9 hours per day. This is a massive portion of our days being spent blankly staring at our large screens in hope of some gain. With such an influx of people, streaming services like Hulu, Disney+, Amazon Prime Video, and others have been on the rise with viewership. However, previously a giant, Netflix has fallen down a steep hill within the past year and hit the lowest it has ever been in the past 5 years with respect to its stock value.
Netflix has towered over the streaming and entertainment industry for a good part of the last decade and things did not seem to be slowing up for the multi-billion dollar company going into 2022. However, with the pandemic having ceased movement throughout the world, people reverted to their television sets more than ever in hopes of some sort of way to numb their boredom or sorrows. While this may have been seen as a positive at first, Netflix’s troubles had just begun as more streaming services were popping up and new services like Disney+ were skyrocketing in popularity, threatening to take over Netflix. With the lack of anything that was as creative and new as other services, people began to lose interest in Netflix and the company suffered their first year within the last decade of a decline in subscribers, which was revealed to be 200,000 lost members. As this news broke out panic ensued and the stock absolutely plummeted into an abyss with a 68% loss within the span of four months.
Since April, Netflix has scrambled to get its act together and has attempted to outreach into options previously not considered such as an ad-tier subscription plan which is their most prominent promise yet. This was previously turned down as it “could hurt the Netflix experience” but has been reintroduced and leads the path forward with a bright and shining torch. Less significantly, Netflix also hopes to prevent account sharing between households in order to increase monetization opportunities and have created a system that has generally proven to be positive for the company’s growth. The largest boost they received this year was from their Q3 earnings report which ended with a massive shock against analyst’s predictions having a $3.10 EPS (earnings per share) while it was expected to have a $2.12. With this being a 50% beat against predictions, stock prices soared from a measly $240 per share to $275 instantly and have continued to rise and currently sit at a healthy $330. Netflix did not waste this wake up call given to them and have invested their time into truly improving the company. The future looks bright for Netflix, and while there remains a long path to walk for them to achieve their former glory, if this dedication to quality improvement continues with consistency, there is no doubt they will surpass it.