The majority of people just think of Netflix as a streaming service, but it has become the future of television entertainment for many. I fired my cable company two months ago and I don’t miss it one bit. A streaming service such as Netflix is as little as 1/10th the cost of a cable subscription, yet has far better quality content than anything I had on my cable company’s “Ultimate Plan.” I’m saving nearly $100/month and I feel like I’ve lost nothing in doing so.
Rapid Subscriber Growth
Lately Netflix has received a lot of negative headlines, mostly related to the cost of its original content, but Netflix is still growing rapidly. The number of subscribers seems to be growing with no end in sight, and the expansion into 130+ countries is seemingly being met with open arms. If you want to get an idea of how fast Netflix is growing, simply look at this graph which portrays the number of subscribers it had in each quarter:
The Disney Deal
Not only are they growing rapidly, but their recent deal with Disney puts them in an exclusive position to dominate the family-entertainment market. How many families will choose Netflix over Amazon Prime solely because it ensures their children can watch any Disney movie or show they want?
If that’s not enough, the deal also gave them exclusive rights to stream Lucasfilm, Pixar, and Marvel movies too. Disney and its subsidiaries are a content powerhouse and their titles add a plethora of content to Netflix that many consider to be timeless.
The Apple Buyout Rumor
While it’s just a rumor, Apple has been discussing an acquisition for several months; there was speculation that they would buy Time Warner but recent reports cite that bankers which worked with Apple say the company is considering purchasing Netflix. With Netflix having a current valuation of 43 billion, and Apple having over 200 billion in cash, the purchase would appear to be a decision that Apple should be very interested in.
The purchase would not only benefit Netflix shareholders, but Apple shareholders as well. Apple could use the subscriber base, which dwarfs Apple TV – it’s arguable that Apple TV was not successful when compared to the competition and their revenue is slowing down; Netflix is already profitable – imagine how much more profitable they will be once they reach the subscriber ceiling.
Netflix is a stock that, in my opinion, everyone should own a piece of. Despite a recent spike of nearly 15% in the past week, it’s not too late to get in and make some money. Even if the Apple buyout doesn’t happen, there is no ending to Netflix subscriber growth anytime soon.
Disclosure: I own shares in Netflix, there are personal opinions in this article and any decision you make to invest is yours and yours alone.