Netflix is a US subscription-based media services provider based in California and founded in 1997. The platform is available globally, other than in mainland China, Syria, North Korea and Russia. Its popularity has grown rapidly since its inception, to become one of the most popular streaming services for movies and on-demand television programmes.
The company is headquartered in Los Gatos, California, and has two CEOs: Reed Hastings (since 1998) and Ted Sarandos (since 2020). It’s ranked within both the Fortune 500 Index and the Forbes Global 2000 annual rankings.
What does the company offer?
Netflix was founded by American businessman Reed Hastings to originally offer DVD rental and purchasing services. The purchasing side of the business ceased within a year to allow the company to focus solely on DVD rentals. It expanded its product offering in 2007 when it began to offer online streaming of popular films and television series, as well as producing original content. Its first feature was the drama series House of Cards.
By using a fixed-fee subscription service, customers gain unlimited access to a vast library of thousands of films and TV shows. Since the hiring of Mike Verdu, a former executive of both Facebook and Electronic Arts, there are plans to expand by bringing video games to the platform. A trial of this new service was conducted in Poland in 2021, with a mobile game based on the popular original content series Stranger Things.
The company’s subscriber list has grown steadily since its inception, starting at 34 million registered users in 2013, and jumping to an impressive 221 million in 2022, according to Statista. Its staff count has also grown to more than 11,000 members across all its divisions.
The company is rapidly expanding its original content offerings, and this is reflected in its yearly spend. In 2016, new content cost $6.9bn, whereas in 2021, this number increased to $17bn. The majority of Netflix’s revenue is generated from its largest market, North America.
Netflix share price history
Netflix stock is in consistent demand, as it has become the largest entertainment company by market capitalisation, despite strong competition from Amazon Prime, Apple and Disney. It’s often referred to as a tech giant and is included on the list of ‘FAANG’ stocks, which are seen as the most prominent technology companies within their sector.
After its IPO in 2002, the Netflix share price remained under $10 per share, until 2010, when it first reached this point, and subsequently overtook The New York Times on the S&P 500 list, according to CNBC. 2011 was a turbulent time for Netflix stock, as it revealed it had lost 800,000 subscribers. This, combined with high costs for international expansion and unpopular price increases, caused a 35% drop in the company’s share value. The stock price failed to break the $20 per share mark until January 2013, after its shares rocketed 71% after positive quarterly earnings reports and an optimistic outlook.
Netflix shares reached a high of $411 in June 2018, after strong fourth-quarter subscriber results showed the company had gained 8.3 million new subscribers, which was 2 million above the company’s own target. After several more peaks and troughs, the company reached an all-time high in November 2021, when the share price was valued at $682.61. This can be attributed to the Covid-19 pandemic and worldwide lockdowns causing a major increase in online activity.