Netflix (NFLX)

What is Netflix?

Netflix is a world-famous internet TV network that had over 117 million paying subscribers in 190-plus countries as of January 2018. It streams more than 140 million hours of movies and shows every day. The company's members can enjoy unlimited documentaries, feature films and original series any time of day or night, using any internet-connected device. Members can watch their favourite video content without any commercials.

Netflix operates in three segments: international streaming, domestic streaming and domestic DVD. The company expects the era of internet entertainment to be long and enduring, and aims to continue being one of the leading players in the sector. Netflix thinks it can grow to 60-90 million members in the US, and its global margin strategy is “to expand internationally as fast as possible while staying profitable”.

Who are the key people at Netflix?

Reed Hastings, who co-founded Netflix, is Chief Executive Officer. As well as being a highly influential figure in the internet entertainment industry, he is active in educational philanthropy.

Other key people at the company include Chief Marketing Officer Kelly Bennett, Chief Communications Officer Jonathan Friedland, Chief Product Officer Greg Peters, and Chief Content Officer Ted Sarandos. In 2013, Time Magazine named Sarandos as one of its 100 Most Influential People of the year.

What is the modern history of Netflix?

Netflix was founded by Reed Hastings and Marc Randolph in 1997 in Scotts Valley, California. Its initial business model included DVD sales and rental, though DVD sales were soon abandoned in favour of rental by mail. 

In 2007, Netflix expanded its business with the introduction of streaming media; it entered the content-production industry in 2013 with its first series, House of Cards. Since then it has massively expanded the production of both film and TV series, offering Netflix Original content through its online library. 

Netflix’s annual revenue increased more than 10-fold between 2005 and 2016. But despite the growth of its global services, the US remains its most important regional market. 

What are the latest developments at Netflix?

During the course of 2017 Netflix grew its streaming revenue 36% to over $11.6 billion, and more than doubled its global operating income. As the Netflix share price climbed in January 2018, the company reached a market capitalisation of more than $100 billion for the first time.

In February 2018, Netflix poached US TV producer Ryan Murphy from 21st Century Fox in a deal worth up to $300 million – one of the biggest TV production deals ever signed. Murphy will start creating content exclusively for Netflix in July 2018. The move made big waves across the industry, and BTIG analyst Rich Greenfield wrote: “Emboldened by the success of original programming, Netflix has now become the actual studio making original programming. It appears that Netflix may be moving toward its next inflection point, as content increasingly shifts toward internally produced projects created by the biggest names in television.”

Check out our NFLX chart to see the recent ups and downs of the company’s share price.

Where does Netflix operate?

Netflix's headquarters are in Los Gatos, California. The company also has other offices in the Netherlands, Brazil, India, Japan and South Korea. It started its expansion into Europe in 2012, since when it’s become available in the UK, Ireland, France, Germany, Austria and across Scandinavia.

Where is Netflix traded?

Shares in Netflix are listed on NASDAQ. They are a constituent of both the NASDAQ-100 and the S&P 500 indices. Capital.com’s NFLX chart shows you how the stock has been doing in recent weeks.