There was once a time when Netflix was still struggling to become the new Blockbuster. It was the opposite of being on top of the world. Less than three years after its launch, Netflix offered to sell itself to Blockbuster for $50 million. But Blockbuster had other ideas of starting its own online rental service.
In 2018, Netflix is the future. While other companies struggle with digital disruption, Netflix has evolved over the last two decades while trailblazing in the disruption of the movie rental sector. Netflix market value has increased to about $150 billion today. In fact, Netflix market value is now worth more than Comcast.
The video streaming company also reached a record high stock price, gaining 4% on Wednesday for a total market capitalization of $149 billion. Comcast, the largest U.S. cable company, fell close to 2% and ended the day with a market capitalization of $147 billion.
Netflix and Comcast’s Ongoing Standoff
While Netflix and Comcast are two completely different businesses, let’s not forget their paths merge. Comcast owns a sizable broadband company in addition to cable.
On Wednesday morning it announced that it is preparing an all-cash deal for 21st Century Fox’s movie and TV studios, as well as a stake in Hulu to potentially build an on-demand entertainment empire that could compete with Netflix. It also owns Dreamworks and NBC and plans to expand the content library to compete with the streaming giant.
The companies have for years had a passive-aggressive war over the cost of delivering Netflix streams to its customers over Comcast’s broadband network. The cable giant has sought compensation for the heavy traffic that Netflix users generate, arguing that it costs the company a lot to deliver Internet video.
Earlier this year, Netflix released data that showed the average Netflix streaming speed had declined by 27 percent since October. In April, Netflix and Comcast announced they had reached a “mutually beneficial” agreement aimed at smoothing the streaming of Netflix content to the cable giant’s customers.
Impending Threat from Disney
Netflix market value is now close to Disney, which is close to $153 billion. Analysts expect Netflix to surpass Disney as it continues to have a strong year.
Facing an impending threat from rival Disney, the streaming giant has doubled down on its production service. It plans to add more than a thousand offerings of Netflix original by the year’s end.
The streaming has also garnered attention with high-profile deals like multi-year production deal with former President Barack Obama and former First Lady Michelle Obama. Conservative fans have threatened to boycott the service. The Wall Street sees it as a sign of the company’s mojo to attract big-name talent.
To thwart Netflix from surpassing Disney’s market value, chief executive Bob Iger plans to succeed in his efforts to buy much of 21st Century Fox. The acquisition could end up as a value ammunition for online streaming. The phenomenal rise in Netflix market value is a sign of consumers’ growing preference for digital streaming services over traditional television subscriptions.