Netflix Is America’s Greatest Media Company

By Douglas A. McIntyre Published Jan 24, 9:45AM EST

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Netflix Is America’s Greatest Media Company — © wutwhanfoto / iStock Editorial via Getty Images

Mega media conglomerates, struggling with legacy properties, can take a step back. After decades of dominance, their primacy is over. Netflix Inc. (NASDAQ: NFLX | NFLX Price Prediction) has become the premier media company in the world. Its latest earnings prove that.

Netflix added 13.1 million subscribers compared to the same quarter a year ago. This was well above expectations and the largest increase since people were shut in during the worst of the COVID-19 pandemic. This was even though Netflix killed password sharing. However, it may be that people who could not share passwords moved to paid subscriptions.

Netflix also offered that advertising running in-stream would be a growing source of revenue. Amazon, Google and Facebook dominate the digital marketing industry. However, Netflix has a large enough audience that it could be a force in the sector.

One argument insists that the streaming industry has become saturated. Netflix management says otherwise: “We believe there is plenty of room for growth ahead as streaming expands, and our north star remains the same: to thrill members with our entertainment.” With revenue of $8.8 billion in the most recent quarter, Netflix posted an improvement of 12% year over year. Per-share earnings were $2.11, compared to $0.12 a year ago. (These 25 American industries are booming.)

The Also-Rans

There are several large streaming services in an industry that may not have room for all of them. This may not be because of market saturation but because consumers may not be willing to have half a dozen or more services simultaneously. Other than Netflix, the company best positioned to succeed long-term is Amazon.com Inc. (NASDAQ: AMZN). Amazon Prime is bundled with a set of services that Amazon offers, which includes free shipping and space product sales. Prime members are several times more likely to shop at Amazon than people who are not. Prime, therefore, cannot be considered a standalone product.

Warner Bros. Discovery Inc. (NASDAQ: WBD), Paramount Global (NASDAQ: PARA), Walt Disney Co. (NYSE: DIS) and Apple Inc. (NASDAQ: AAPL) are in the tier below Netflix and Amazon. Apple does not break out results for its Apple TV+, but it is a tiny fraction of the company’s total. For the media companies, streaming is core to their growth. However, each one loses money on the business.

As a proxy of how investors view legacy media companies versus Netflix, note that Netflix has a market cap of $235 million while Warner Bros. Discovery’s is $25 billion.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.