To understand netflix, forget the mullet-haired Joe Exotic and his antics in “Tiger King”. Think instead of the bearded El Profesor and the other rogues who populate “Money Heist”, the streaming firm’s exhilarating Spanish-language crime drama about stealing €2.4bn ($2.6bn) from the national mint in Madrid. Like the hijackers, Netflix is taking advantage of the lockdown in many countries to print money. Like El Profesor, the company’s goateed boss, Reed Hastings, is usually a step ahead of everyone. And like the heist’s perpetrators, it has always had one golden rule: stick to the plan. So far it has pulled it off. As one analyst puts it, Netflix is as much a household essential in the covid-19 age as Clorox. Its market value, at more than $190bn, has for the time being risen above Disney’s.

Source: The Economist

Date: April 30th, 2020

Link (five free articles a month): https://www.economist.com/business/2020/04/23/netflix-will-remain-a-blockbuster-hit-beyond-the-covid-19-era

Discussion

1. Note how important “cash burn” is to Netflix. What exactly is “cash burn”?
2. This entire article is built around the flow of money. Without proper financing and cash flow, no technology company (or indeed any company) can survive. What steps are you taking to make sure that your finance knowledge is adequate?
3. Netflix gets its money from subscribers. Apple from sales of iPhones (mostly). Facebook from advertising. Why does it matter a LOT how a technology firm makes money?