In 2023, Netflix is a household name, with the company’s streaming platform being used in households across the world each night. It’s an incontrovertible fact that this company offers subscribers ample opportunity for entertainment. But does it offer investors opportunity to grow by adding Netflix stock to their portfolios via trading platforms? In this article, we’ll share why investing in Netflix could be a smart choice for traders. But first, a quick overview of Netflix.
What is Netflix?
Netflix, Inc. is a US entertainment services company. Its platform allows subscribers across the world to stream films and TV series, including a range of Netflix’s own productions.
The company was created by Reed Hastings and Marc Randolph in 1997. It started off by providing as a DVD-by-mail service, before transitioning to a subscription video-on-demand service in 2007. Data shared by Statista shows that, as of September 2020, Netflix is the most popular subscription video-on-demand service in the world.
Four advantages of investing in Netflix stock
Market leading company
Netflix is the world’s largest streaming-only platform by a large margin. The company’s focus on innovating technologically and producing original content helps it continuously improve the user experience on its platform, allowing it to maintain its significant edge over competitors like Disney, Amazon and Paramount.
Netflix has reported some impressive performance recently. Revenue increased by roughly $200 million between Q1 2022 and Q1 2023, and the company attracted more than 10 million new paid subscribers to its platform, no doubt helped by hit shows such as Stranger Things and You. Bear in mind that past performance doesn’t guarantee future results.
Netflix has hitherto generated most of its revenue through subscription fees. Yet the company decided to change this by offering a cheaper advertising-supported membership tier across some of its markets. This strategic shift could help Netflix attract more consumers with a budget-friendly option, thereby augmenting its revenue stream and widening its moat against competitors who offer similar ad-supported plans – all without cannibalising its existing subscription-only scheme.
Password sharing bans
For years, Netflix has been lenient towards subscribers who share their passwords with family or friends. Yet this changed earlier this year, when the company announced it would start charging extra fees for account sharing. Although this decision could frustrate some longtime users, it could also lead to greater revenues for the company in the near future.
Being a market-leading company, Netflix’s stocks aren’t cheap. Yet they could be well worth buying if you’re looking for a stock with plenty of advantages to add to your portfolio.