Netflix (NFLX) is reaching close to 1 billion TV fans globally with their content, and that can obviously generate a lot of virility for great pieces of content.
That being said, the content has to deliver. Yet that’s what Netflix has essentially done from the beginning, repeatedly offering world-class content that is consumed in nanoseconds.
If you think about the big picture, NFLX is at 213 million subscribers and that doesn’t make a dent compared to pay-TV households, ex-China.
But NFLX certainly believes they can match pay-TV households, and that aspiration signals plenty of room for growth.
Streaming is developing at a breathtaking pace, all kinds of devices and competitors helping that market grow, and it’s not just NFLX even though many of us live in a NFLX-centric world.
Then when I think about what’s out there in terms of competition — competition of content because NFLX doesn’t live in a vacuum.
Allowing to scale with this robust network and offering titles like Squid Game a chance to go viral really just signals overperformance for the NFLX business as a whole.
The most incredible part is the system that NFLX built from scratch that has turned into a highly distributed business model when it was NFLX’s Korean team two years ago that commissioned the hit show.
Just the synergy in that is great for NFLX, while really driving a narrative of a strong international audience that is digesting the Netflix content engine.
To that, I must give NFLX management credit for pushing hard into the content creation business and they have really made miracles happen up against the pandemic and all, but now with the team wrestling with the post-COVID, how do things move forward?
It all comes back to if NFLX can be that first choice in entertainment, then ultimately, that's what's driving that secular growth from linear to streaming entertainment and specifically NFLX’s platform.
The NFLX team recognized something that nobody else did and created an environment for that creator to make a great show.
They pretty much found the best content creators, handed them boatloads of cash, and said go make something kickass and they did.
Hollywood has been notorious for not only selling out but for micromanaging content creators and suffocating the creation process.
Clearly, when creative artists are not given the freedom to create, it negatively impacts the end-product, and that’s a pivotal reason linear television and Hollywood are now chasing NFLX.
NFLX is now the King of content going viral and going viral is really hard to predict, but it's super powerful when it happens, and they deliver the goods to be able to deliver that much viewing when viewers storm NFLX’s platform to consumer adjacent content that turns into binge-watching.
And you have people talk about it in ravenous terms that you can spoof it on Saturday Night Live because it's so in the zeitgeist.
Few companies in the world can accomplish that.
Now it’s not only Korea’s Squid Game, but NFLX is churning out the viral hits like with La Casa de Papel from Spain, with Lupin from France, with the film Blood Red Sky from Germany, from Sex Education in the U.K., where the stories of the world can increasingly come from anywhere in the world.
NFLX has systemized a way to build great hits.
Non-English content viewing has grown three times since NFLX started in 2008 making content.
Installing new storytellers into the world from everywhere in the world is supercharging the business model and that’s why we are experiencing a massive melt-up in NFLX shares.
