Netflix (NFLX +0.47%) may have lost the bidding war for Warner Bros. Discovery, but it might not be a defeat after all. When Netflix’s co-CEOs Ted Sarandos and Greg Peters decided not to match Paramount Skydance‘s $110 billion offer, the company turned its focus to other growth channels.
Acquiring Warner Bros. would’ve put immense pressure on Netflix’s balance sheet. Now, the streaming behemoth can lean on three proven growth pillars to help the stock continue to soar. The three growth channels include aggressively acquiring international subscribers, streaming more live events, and gaming.
All three will help Netflix continue to dominate for years to come — and that should be good news for investors.
Today’s Change
(0.47%) $0.48
Current Price
$103.50
Market Cap
$435B
Day’s Range
$102.06 – $103.67
52wk Range
$75.01 – $134.12
Volume
544K
Avg Vol
48M
Gross Margin
48.59%
Searching for global streaming domination
Netflix may be close to saturation in the United States, but internationally it has plenty of room to run. According to the International Trade Association, the global media and entertainment market is approximately $2.8 trillion annually. The opportunity for Netflix is massive, as it’s estimated that the company has fewer than 300 million subscribers outside of the U.S.
The streaming giant is focused on creating localized content to ensure that its television and film options resonate with audiences far beyond U.S. borders. Netflix is now available in 190 countries. It’s also using partnerships and collaborations to expand its reach and distribution.
Image source: Getty Images.
Bringing the game or concert into your living room
Live content is a newer tool in Netflix’s belt. Netflix has hosted more than 200 live events thus far. From major sports championships to concerts, and even famed climber Alex Honnold scaling the side of a skyscraper, Netflix wants a broad offering of live events to capture more eyeballs around the world.
By offering a range of live events, Netflix can scale its ad tier, as consumers are less likely to skip ads during live events. Live-streamed sports and concerts are another tool for Netflix to acquire and retain subscribers.
Netflix is playing games
Gaming is one of the most under-appreciated pieces of Netflix’s growth. Netflix is scaling its cloud-first games strategy. This move into gaming positions Netflix as an interactive platform and multimedia entertainment ecosystem, rather than just a passive television and film service. Through gaming, Netflix will capture the attention of even more subscribers for longer periods.
Netflix’s stock has been fairly muted over the past 12 months, up just over 13%. The stock is currently fairly priced, with a forward price-to-earnings ratio of 31. The valuation metrics have improved, and now that it has all its attention back on international growth, live events, and gaming, Netflix looks poised to continue soaring.