2018 has been a really strong year for Netflix. The streaming video giant’s stock price is up over 75% year to date, while breaking HBO’s 17 year streak as the most nominated network at the Emmy Awards, garnering 112 nominations. Even with all the accolades, some think that Netflix’s growth is starting to plateau. The company recently announced disappointing subscriber growth numbers for Q2 which sank its stock price 14% . Experts estimated 1.19 million new subs in the United States, when actual numbers came in 44% short. International customers also fell short of expectations (4.47 million actual vs 5.11 million estimated). Netflix is treated like a unicorn startup even though its been in busy for 20 years, so is rocket ship growth starting to taper? Is the super crowded streaming content market catching up in producing attractive programming?
Even with the concerns, Netflix still has over 13o million subscribers worldwide which is a massive audience. The company is also forecasted to invested a jaw dropping $13 billion in content to keep that 130 million engaged while attracting new eye balls to the service. This is a massive operating costs, when you take into account that its most expensive plan is $13.99. So how does Netflix event make money? The Ringer recently produced a very insightful and well done video explaining Netflix’s business model and why its recent stock price slippage isn’t that much to worry about. Check out the video below.