this week on case studies with the biz
doc it’s Netflix they’re at an all-time
high on the stock market worth a hundred
and fifty eight billion dollars it’s
been amazing decade of growth as cable
and satellite have had their issues but
Netflix is filming and buying and
offering you and me more content than
ever but there’s trouble on the horizon
and I’m gonna tell you whether it’s doom
or not for Netflix Netflix the last
decade has been incredible and for those
of you that didn’t follow it before that
I’m gonna catch you up real quick before
we run through 2007 to 2018 where we are
today in the beginning 1997 out there in
Scotts Valley just a little bit south of
San Jose in the bay area of California
Reed Hastings creates Netflix and he
starts by selling DVDs and then in 1999
he started a subscription service for a
couple bucks a month you make a list of
the movies you want and they would mail
them to you when you mail the couple
back they send you the next ones that
are on your list it was really a
fantastic service as a matter of fact in
the year 2000 they actually stopped
offering single rentals you had to pay a
little subscription fee and then they
would mail you things that were on your
list by 2001 DVD players had crashed to
$200 and this was a key point for Reed
and Young Netflix cuz the first four
years was over they had had some
troubles but when those DVD players hit
200 bucks there was one in every living
room and suddenly they were off and
running leading to 2002 when they went
public their IPO at the time it was $15
a share they offered and they raised
about a hundred million dollars on IPO
day and about two months later that may
seem like nothing when we hear recent
IPOs with Dropbox in the multiple
billions of dollars but nonetheless this
was 2002 and little ol Netflix was off
and running and on the stock market from
there the growth continued following
that IPO for years to get to a billion
dollars in sales it took another four
years to get to 2 billion in sales so
now here you are from 1997 to 2010 13
years and there are a two billion dollar
company but the stock was relatively
flat over the same time they celebrated
over into seven their billionth DVD
shipped to people like you and me that
were getting those little red envelopes
the mail and they had about five million
subscribers already on that very young
DVD subscription program about that same
time they reached 20 million subscribers
considering those four years prior they
were at five so they went up for Exxon
subscribers and they had doubled to two
billion dollars young Netflix was off
and running it only took them a year to
go from two to three billion dollars so
going to 2012 they were at 3.6 billion
so let’s keep following the revenue line
for a second so that we really get a
feel for the momentum this young company
was generating when I say young company
it’s young on the stock market even
though it was now 14 15 years old as
they go into 2013 there’s something
really interesting that was happening
they were a very very steady growth but
their stock price was still not lagging
but had its Upton’s down but it really
wasn’t taking off the way the revenue
was so now this company that is young
buy stock market standards but they’re
about 15 years old in 2012 they keep
driving they add another three quarters
of a billion dollars of revenue in 2013
crossing four billion they cross five
billion in 2014 adding one point two
then you get to 2015 now they’ve added
2.2 billion dollars to their revenue
line year over year in at six point
eight now think about that for a second
they just added 2.2 billion dollars in
revenue from one year to the next and it
took them from 1997 to 2010 to generate
their first two billion dollars so you
can see now they’re adding revenue year
over year that took them years to reach
that pinnacle not so long ago they then
add another two billion dollars in
revenue 2016 and they’re at eight point
eight take a look at that pink line now
we can see what’s happening they are now
driving and driving hard and if we look
at 2016 there’s something else that’s
starting to happen over the top
meaning services such as Hulu DirecTV
now sling from the Dish Network are all
starting to take subscribers from the
sit at home cable and satellite
subscription we want those subscriptions
we want to be able to take them on the
go to look at them on our phone to look
at them on an over-the-top TV at home
and we’re not watching TV the way others
used to and suddenly people are saying
I’m just gonna go home and binge on
Netflix these sort of phrases are
jumping into the American psyche and
around
the world my wife and I used to binge on
house of cards
you can see that stock price is running
and we’re also gonna see what was
happening internationally in just a
second we get to 2017 and they add 2.8
billion almost eleven point six billion
dollars in revenue 2.8 added
year-over-year and you can just see
what’s going on there to an all-time
high as we film this in the second
quarter of 2018
three hundred sixty five dollars a share
and a hundred and fifty eight billion
dollars in value and when you look at
that run rate all that there’s only one
word for that and that is damn that is a
run rate net as high value now let’s
step back a second and look at what was
happening to subscription and more
importantly international from that
reference point I gave you of that one
billionth DVD ship the blue at the top
of these bars represents the
international subscribers and the orange
is the US subscribers so you can see ten
and eleven just seven eight years ago
they were basically a US company all the
sudden in 2012 thirty three million
streaming subscribers and fourteen
percent of them are international
they’re gaining international rights
they’re buying authentic international
content they’re not just dubbing US
movies they are sourcing local content
putting it in the library and so people
in other countries are able to see
locally produce programming Bollywood
Italy thriving cinematic industries and
so that contents available to Netflix
subscribers in those countries you go a
year later
suddenly it’s twenty-one percent
international and look at that they’ve
had at eleven million subscribers year
over year 2014 thirty two percent
international and they’re at fifty seven
million fourteen to fifteen forty
percent international and they’re at
seventy four million subscribers sixteen
almost half international ninety-three
million subscribers seventeen I forgot
to put the percent on the board but it
was fifty percent it’s now half
international 117 million subscribers
and something just happened first
quarter of 2018 was announced and take a
look at this they added seven point four
million subscribers in one quarter
that’s almost worth another damn five
point four six international 1.96 USA
seventy-three percent of their growth
came from international
and at the end of the first quarter end
of March 2018 Netflix is sitting on a
hundred and twenty five million
subscribers to the streaming service but
there is trouble on the horizon ESPN is
part of Disney Disney’s own streaming
service is going to be powered by BAM
tech a company that Disney owns a
significant percent of go back and look
at my major league baseball advanced
media case study that I did several
weeks ago and you’ll find out who BAM
Tech is BAM tech power demo be streaming
one of the best streaming services of
any of the sports leagues now Disney
streaming service is going to be powered
by BAM Tech and it’s for real
other sports league it actually asked
them to do their streaming services so
Disney has the technology package to
pull it off and what they’re threatening
to do with that technology package is do
the Disney video network and pull their
content off Netflix in 2019 no Indiana
Jones no Star Wars no Little Mermaid and
everything that went with it Incredibles
cars all those franchises Pirates of the
Caribbean they’re all part of Disney are
gonna come off so what do you do it for
your Netflix
well so far Reed Hastings has been a
great entrepreneur and he has surf all
kinds of peril in his life and what
they’re doing this year should tell you
what they’re thinking they are spending
eight billion dollars in content this
year 2018 and two billion on marketing
to build eight hundred programs which
includes a hundred and forty some
million dollar deal they made with the
Obamas for documentary political
intrigue and things like that so they’re
pulling out all the stops here in 17 18
and 19 getting ready for what will
probably be a Content shift if Disney
launches on time I think Disney’s
launching on time so I believe Netflix
is probably doing the right thing
the question is will the hits be there
to take the place of all that Disney
content and will people like you and me
still think that eleven ninety-nine a
month is a fair price without it I think
this has been a very compelling story
over a decade of change that’s been
happening in cable satellite and content
around the world as Netflix has
successfully navigated it I think the
blend they have
and their own content gives them a
fighting chance to survive the loss of
Disney but again it’s gonna take every
entrepreneurial bone and Reed Hastings
body to survive it because Disney is
king of content meanwhile we’re gonna
enjoy Hulu DirecTV now and all these
other wonderful over-the-top sources for
our programming to watch what we want
when we want because we’re not couch
potatoes watching TV in the old way
leave some comments and tell me what you
think about over-the-top and about
Netflix and what’s happening here you
can also follow me in social media over
on Instagram and Facebook where I have a
new page
speaking of subscribers please subscribe
to the channel because as you’ve
probably heard we are on a mission to
get value tainment to a million
subscribers and when we do the first
annual value team at conference will be
held where entrepreneurs can hear from
Patrick bet David yours truly the biz
doc and other leaders so we can help you
make your company better your employees
better and the customers and people you
touch to that company better still until
next time I’m Tom Mills with the biz doc
and I hope I left you better than I found you
doc it’s Netflix they’re at an all-time
high on the stock market worth a hundred
and fifty eight billion dollars it’s
been amazing decade of growth as cable
and satellite have had their issues but
Netflix is filming and buying and
offering you and me more content than
ever but there’s trouble on the horizon
and I’m gonna tell you whether it’s doom
or not for Netflix Netflix the last
decade has been incredible and for those
of you that didn’t follow it before that
I’m gonna catch you up real quick before
we run through 2007 to 2018 where we are
today in the beginning 1997 out there in
Scotts Valley just a little bit south of
San Jose in the bay area of California
Reed Hastings creates Netflix and he
starts by selling DVDs and then in 1999
he started a subscription service for a
couple bucks a month you make a list of
the movies you want and they would mail
them to you when you mail the couple
back they send you the next ones that
are on your list it was really a
fantastic service as a matter of fact in
the year 2000 they actually stopped
offering single rentals you had to pay a
little subscription fee and then they
would mail you things that were on your
list by 2001 DVD players had crashed to
$200 and this was a key point for Reed
and Young Netflix cuz the first four
years was over they had had some
troubles but when those DVD players hit
200 bucks there was one in every living
room and suddenly they were off and
running leading to 2002 when they went
public their IPO at the time it was $15
a share they offered and they raised
about a hundred million dollars on IPO
day and about two months later that may
seem like nothing when we hear recent
IPOs with Dropbox in the multiple
billions of dollars but nonetheless this
was 2002 and little ol Netflix was off
and running and on the stock market from
there the growth continued following
that IPO for years to get to a billion
dollars in sales it took another four
years to get to 2 billion in sales so
now here you are from 1997 to 2010 13
years and there are a two billion dollar
company but the stock was relatively
flat over the same time they celebrated
over into seven their billionth DVD
shipped to people like you and me that
were getting those little red envelopes
the mail and they had about five million
subscribers already on that very young
DVD subscription program about that same
time they reached 20 million subscribers
considering those four years prior they
were at five so they went up for Exxon
subscribers and they had doubled to two
billion dollars young Netflix was off
and running it only took them a year to
go from two to three billion dollars so
going to 2012 they were at 3.6 billion
so let’s keep following the revenue line
for a second so that we really get a
feel for the momentum this young company
was generating when I say young company
it’s young on the stock market even
though it was now 14 15 years old as
they go into 2013 there’s something
really interesting that was happening
they were a very very steady growth but
their stock price was still not lagging
but had its Upton’s down but it really
wasn’t taking off the way the revenue
was so now this company that is young
buy stock market standards but they’re
about 15 years old in 2012 they keep
driving they add another three quarters
of a billion dollars of revenue in 2013
crossing four billion they cross five
billion in 2014 adding one point two
then you get to 2015 now they’ve added
2.2 billion dollars to their revenue
line year over year in at six point
eight now think about that for a second
they just added 2.2 billion dollars in
revenue from one year to the next and it
took them from 1997 to 2010 to generate
their first two billion dollars so you
can see now they’re adding revenue year
over year that took them years to reach
that pinnacle not so long ago they then
add another two billion dollars in
revenue 2016 and they’re at eight point
eight take a look at that pink line now
we can see what’s happening they are now
driving and driving hard and if we look
at 2016 there’s something else that’s
starting to happen over the top
meaning services such as Hulu DirecTV
now sling from the Dish Network are all
starting to take subscribers from the
sit at home cable and satellite
subscription we want those subscriptions
we want to be able to take them on the
go to look at them on our phone to look
at them on an over-the-top TV at home
and we’re not watching TV the way others
used to and suddenly people are saying
I’m just gonna go home and binge on
Netflix these sort of phrases are
jumping into the American psyche and
around
the world my wife and I used to binge on
house of cards
you can see that stock price is running
and we’re also gonna see what was
happening internationally in just a
second we get to 2017 and they add 2.8
billion almost eleven point six billion
dollars in revenue 2.8 added
year-over-year and you can just see
what’s going on there to an all-time
high as we film this in the second
quarter of 2018
three hundred sixty five dollars a share
and a hundred and fifty eight billion
dollars in value and when you look at
that run rate all that there’s only one
word for that and that is damn that is a
run rate net as high value now let’s
step back a second and look at what was
happening to subscription and more
importantly international from that
reference point I gave you of that one
billionth DVD ship the blue at the top
of these bars represents the
international subscribers and the orange
is the US subscribers so you can see ten
and eleven just seven eight years ago
they were basically a US company all the
sudden in 2012 thirty three million
streaming subscribers and fourteen
percent of them are international
they’re gaining international rights
they’re buying authentic international
content they’re not just dubbing US
movies they are sourcing local content
putting it in the library and so people
in other countries are able to see
locally produce programming Bollywood
Italy thriving cinematic industries and
so that contents available to Netflix
subscribers in those countries you go a
year later
suddenly it’s twenty-one percent
international and look at that they’ve
had at eleven million subscribers year
over year 2014 thirty two percent
international and they’re at fifty seven
million fourteen to fifteen forty
percent international and they’re at
seventy four million subscribers sixteen
almost half international ninety-three
million subscribers seventeen I forgot
to put the percent on the board but it
was fifty percent it’s now half
international 117 million subscribers
and something just happened first
quarter of 2018 was announced and take a
look at this they added seven point four
million subscribers in one quarter
that’s almost worth another damn five
point four six international 1.96 USA
seventy-three percent of their growth
came from international
and at the end of the first quarter end
of March 2018 Netflix is sitting on a
hundred and twenty five million
subscribers to the streaming service but
there is trouble on the horizon ESPN is
part of Disney Disney’s own streaming
service is going to be powered by BAM
tech a company that Disney owns a
significant percent of go back and look
at my major league baseball advanced
media case study that I did several
weeks ago and you’ll find out who BAM
Tech is BAM tech power demo be streaming
one of the best streaming services of
any of the sports leagues now Disney
streaming service is going to be powered
by BAM Tech and it’s for real
other sports league it actually asked
them to do their streaming services so
Disney has the technology package to
pull it off and what they’re threatening
to do with that technology package is do
the Disney video network and pull their
content off Netflix in 2019 no Indiana
Jones no Star Wars no Little Mermaid and
everything that went with it Incredibles
cars all those franchises Pirates of the
Caribbean they’re all part of Disney are
gonna come off so what do you do it for
your Netflix
well so far Reed Hastings has been a
great entrepreneur and he has surf all
kinds of peril in his life and what
they’re doing this year should tell you
what they’re thinking they are spending
eight billion dollars in content this
year 2018 and two billion on marketing
to build eight hundred programs which
includes a hundred and forty some
million dollar deal they made with the
Obamas for documentary political
intrigue and things like that so they’re
pulling out all the stops here in 17 18
and 19 getting ready for what will
probably be a Content shift if Disney
launches on time I think Disney’s
launching on time so I believe Netflix
is probably doing the right thing
the question is will the hits be there
to take the place of all that Disney
content and will people like you and me
still think that eleven ninety-nine a
month is a fair price without it I think
this has been a very compelling story
over a decade of change that’s been
happening in cable satellite and content
around the world as Netflix has
successfully navigated it I think the
blend they have
and their own content gives them a
fighting chance to survive the loss of
Disney but again it’s gonna take every
entrepreneurial bone and Reed Hastings
body to survive it because Disney is
king of content meanwhile we’re gonna
enjoy Hulu DirecTV now and all these
other wonderful over-the-top sources for
our programming to watch what we want
when we want because we’re not couch
potatoes watching TV in the old way
leave some comments and tell me what you
think about over-the-top and about
Netflix and what’s happening here you
can also follow me in social media over
on Instagram and Facebook where I have a
new page
speaking of subscribers please subscribe
to the channel because as you’ve
probably heard we are on a mission to
get value tainment to a million
subscribers and when we do the first
annual value team at conference will be
held where entrepreneurs can hear from
Patrick bet David yours truly the biz
doc and other leaders so we can help you
make your company better your employees
better and the customers and people you
touch to that company better still until
next time I’m Tom Mills with the biz doc
and I hope I left you better than I found you
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