Why should you invest in Netflix shares?
Introduction
Ever since the pandemic hit the world, online streaming sites have been enjoying stellar market performances. Netflix, one of the best sites, has successfully transformed from relying on third party content to producing their own to producing their own unique and original content. Their markets have expanded internationally. Although Netflix had a rocky phase during the pandemic, it did manage to regroup and has come back strong ever since. The volatility of Netflix share price might be scary to potential investors but have a closer look before you jump to a conclusion. Netflix has been crowned “the king in streaming” for a reason.
Here are a few reasons why you should invest in Netflix shares now:
1. Membership growth
The COVID-19 pandemic has contributed to an alarming growth in Netflix subscriptions. Millions of people worldwide were looking for alternative sources to keep themselves entertained. As it is a very user-friendly streaming platform, it is not going to lose its throne of being a fan favourite anytime soon. Even under a shaky macro scenario, the platform performed relatively well.
2. New environment strategies
Despite having an excellent brand name and recognition, Netflix has employed different strategies to keep its niche in the market. The introduction of a lower-priced ad-supported subscription plan is an example of this. They reduce the subscription rates in many countries to help maximise revenue in the long run.
3. Paid-sharing could pay off
Netflix tended to look the other way as members could share their accounts with whomever they wanted. It was recently that the company finally took the chains and systematised the password-sharing process. This is expected to increase the revenue growth as subscribers add on each quarter. This password sharing alone could represent a billion value increment opportunity.
4. First mover advantage
Netflix has had a long head start compared to the younger rivals in the market today. It has been the leader of the market for over a decade. This benefits the platform in a major way as it helps the company to produce more hit shows and movies and acquire them. As content costs are relatively fixed, the additional subscribers are a boon. Moreover, its huge scale has earned the platform a solid financial footing. So, a planned price hike that is expected to come soon can further boost this financial metric.
5. Scope of growth
The pandemic had dealt with a few fluctuations in the subscriber base. But with the planned strategies and steady increase, it is expected to stay strong and grow more in the coming years. Owing to its great content and innovation, the platform has been able to generate great TV shows and movies like fan favourites Squid Game and Stranger Things that have taken the scope to soaring heights.
Conclusion
As an overview, all the above reasons can assure of Netflix’s growth potential. Along with that, their new innovative ideas like, launching immersive experiences, can lead to a very strong revenue pool in the future. Choose a reliable financial advisor before you invest. With 5paisa, you can explore all the detailed research analysis and trends and make an educated choice. Go through all the other share prices like Servicenow share price, which is also growing to be a market leader and is valued at an affordable rate. Use the available data and have an immersible investment experience.
