Skip to Content
US Videos

Strong Start for Netflix, but Shares Pricey

We expect the narrow-moat firm to continue to spend on content as it expands its focus there ahead of Disney's arrival.


Neil  Macker: Netflix started off 2018 on a strong note, as it beat its own subscriber guidance once again. The firm continues to expand and now has over 56 million subscribers to the United States, with over 125 million globally. Management continues to attribute its out performance on subscriber growth to the continued adoption of streaming video worldwide and its expanding content library.

The firm projects to spend $7.5 billion to $8 billion on content in 2018, up sharply from $6 billion in 2017. The firm has expanded its content focus, moving away from the original scripted shows that have been previously focused on into unscripted shows such as the "Queer Eye" reboot and "Nailed It." We expect the firm to continue to expand its content focus as it ramps up its content library in anticipation of Disney's entrance into the market in 2019.

Neil Macker does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.