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Netflix is undefeated (reprise)

Netflix is undefeated (reprise)

The king of streams continues to make it look easy

Moses Sternstein's avatar
Moses Sternstein
Jul 23, 2024
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Netflix is undefeated (reprise)
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  • Netflix profits to the moon

  • Converting expensive content into subscribers is easy, though, right? Ask Apple

  • YouTube is the only competition that seems to matter


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Netflix is undefeated (reprise)

It’s hard to understate how far ahead Netflix is relative to other streamers.

Netflix is on pace to deliver ~$40B in revenue, and ~$9B in profit this year:

Bloomberg

Netflix’s first half profits of ~$4.5B are almost double the previous years, on both improved topline and margins.

Now, in order to generate that $40B in revenue, Netflix spends about ~$16B/year on content. That’s substantially more than anyone else (besides Amazon), but when it’s all said and done, spending $16B to generate $40B is a good trade.

Seems like an easy formula, right? Spend a bunch of money to make and license content, build a wizbang automagical recommendation engine, and then watch the subscription revenue roll in.

Apple makes lemons

Consider AppleTV, for example.

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