Wednesday, December 2, 2020
Dec. 2, 2020

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Netflix’s 10-year 4,000 percent rally underlines shift to streaming

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Over the past 10 years, Netflix has led a revolution in the way the world consumes entertainment, and in doing so, it ruled over Wall Street.

The shares have soared nearly 4,100 percent since the end of 2009, a gain that at one point made Netflix a larger company than Walt Disney Co. by market value. No other S&P 500 component has experienced a return that approached anything like Netflix’s this decade; the second-best performer, MarketAxess Holdings, is up a comparably paltry 2,600 percent. The benchmark index itself is up about 190 percent, while the S&P 500 communication-services index is up less than 60 percent.

The advance reflects an industrywide shift to streaming video, a trend that Netflix has been at the forefront of. While the company first introduced on-demand streaming in 2007, it became a central part of the company’s identity in early 2013 with the debut of “House of Cards,” a high-profile and big-budget political thriller that would go on for six seasons and be nominated for dozens of Emmy Awards. The bulk of the company’s decade-dominating surge came in the wake of the release.

The impact of streaming on the entertainment industry is difficult to overstate. Movie-theater chains have struggled against this new form of competition, while the cable industry has faced an exodus of “cord cutters” abandoning traditional TV. Roku Inc., which operates as a platform for streaming services, recently predicted that ad revenue related to streaming would soon eclipse that of traditional TV, while even nonmedia companies like Facebook and Apple Inc. have been making investments into original content in a bid to keep users in their “ecosystems.”

Netflix was hardly the only company in the streaming space over the past decade — notable rivals include Hulu and Amazon’s Prime Video — but customers flocked to it, with its global subscriber base expanding from less than 45 million in 2013 to more than 166 million last quarter. International growth has been a major focus.

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