Inside the Streaming Wars: How Netflix Battled to Stay on Top

🔥 This Week’s Insights:

• US Inflation Drops: What It Means For You

• Learn about Netflix’s Streaming Wars and the Role of Competitive Strategy in Stock Analysis

• Help Me Build Something You Love in 10 Seconds! Don’t Forget to Give Me Feedback!

WHAT THE MARKETS TAUGHT US THIS WEEK:
📊 US Inflation Drops, But the Path Ahead is Bumpy

In September 2024, US inflation fell to 2.4%, but core inflation rose to 3.3%, leading many to expect an interest rate cut in November.

For new investors, understanding how interest rates impact stocks and bonds is key.

Lower rates can boost stock prices but may reduce bond yields.

It’s important to evaluate your portfolio's risk exposure and seek personalized financial advice when needed, especially during uncertain times.

STOCK INVESTING MYTHBUSTERS:
🔮 Myth: You should sell when the market drops.

✅ Reality: Panic selling locks in losses. Staying invested during downturns and even buying more can position you for future gains.

 UNLOCK INVESTING SCHOOL’S CHALLENGE OF THE WEEK:
💡Inside the Streaming Wars: How Netflix Battled to Stay on Top

Let’s dive into the rise of streaming services and how Netflix fought to keep its throne during one of the most competitive eras in media history.

I remember growing up with VHS tapes and scanning through shelves at Blockbuster (if you're Gen Z, you probably have no idea what I'm talking about).

Then, boom—Netflix changed everything. What was once a DVD-by-mail service turned into a streaming giant, altering how we consumed movies and TV shows.

By the 2010s, Netflix was dominating, but it wasn’t without competition. As services like Hulu, Disney+, and Amazon Prime started popping up, Netflix's reign seemed under threat. Every new entrant chipped away at Netflix's market share, making the company hustle harder to stay on top.

How did Netflix respond? Well, they didn’t just sit back and watch.

First, they poured billions into original content. Shows like Stranger Things and The Crown weren’t just popular—they became cultural phenomena. And that’s not by accident.

Netflix knew that to keep people hooked, they needed exclusive content that no one else could offer.

At the same time, they expanded globally.

By 2020, Netflix was available in over 190 countries, widening their audience and cushioning against losses in one market by gaining in others. Smart, right?

But all this came at a cost. Their massive investment in content led to increased debt, and with more competitors in the space, Netflix’s stock faced volatility. One moment it’s climbing because of a hit show; the next, it’s dipping because Disney+ launched.

What can we learn from Netflix?

Their ability to pivot, innovate, and grow while under pressure offers a masterclass in competitive strategy. But it also serves as a reminder that even industry leaders aren’t immune to fierce competition.

📝 Practice Problem: Let’s Apply This!

1. Look up Netflix’s stock price over the last 10 years. When did it see the sharpest increases? Were they tied to a specific event like the release of a major show or competitor launch?

2. How did Netflix’s market share change from 2015 to 2020 with the entrance of Disney+ and other competitors? What does this say about their competitive strategy?

3. Check out Netflix's current P/E ratio (price-to-earnings). Is it higher or lower than its competitors? What could this indicate about investor expectations?

4. Analyze one of Netflix’s quarterly earnings reports. What were their biggest revenue drivers? Did any of their competitors impact those numbers?

5. With increasing debt, how has Netflix’s cash flow changed in the last five years? Is it sustainable in a crowded streaming market?

🧠 Dive Deeper: Curated Resources to Expand Your Learning:

If you’re serious about understanding Netflix's success in the streaming wars, here’s one book and one video recommendation to sink your teeth into:

No Rules Rules: Netflix and the Culture of Reinvention by Reed Hastings – Insights into Netflix’s unique culture and strategy.

Watch This YouTube Video: Netflix vs. Disney: The Battle For Streaming Dominance (CNBC) – A deep dive into the streaming wars.

✨ Sharpen your finance knowledge and skills by tackling this week’s Unlock Investing School challenge!

COMING UP NEXT MONDAY ON THE UNLOCK INVESTING PODCAST:
🎙️ The Role of Herd Mentality in Stock Market Bubbles 

Get ready to uncover how herd mentality fuels stock market bubbles—and how to avoid being caught up in the frenzy. Next week, I’ll break down real examples and the psychology behind market crashes, giving you tools to think independently and invest smarter. Don’t miss it!

Subscribe on Apple Podcasts, Spotify, Amazon Music or iHeartRadio!

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Important Disclaimer: The content in this newsletter is for educational purposes only and does not constitute financial advice. All information provided is based on my personal opinions and experiences and should not be taken as a recommendation to buy, sell, or hold any financial instruments. Investing involves risks, including the potential loss of capital, and you should always conduct your own research or consult with a qualified financial advisor before making any investment decisions. Past performance is not indicative of future results.