Netflix, the video streaming company, is valued more than American oil giant ExxonMobil. Stock Prices of the service reached a historic high on April 15 – the cost per share was $448 with an increase of 3.19% on the day. As a result, Netflix’s market value reached $196 billion.
Netflix’s capitalization is growing against the backdrop of the coronavirus pandemic, which played into the hands of the company – more and more people remain at home and, consequently, the number of views is growing. Netflix is now even more valuable than it’s other competitor, Disney, which the market values at $186.6 billion.
At the same time, the price of ExxonMobil shares fell 3% to $39.30, which gave it a market capitalization of $166 billion due to a drop in oil prices. And in 2013, the company was the most expensive in the world, but now this title is shared by technological titans Apple and Microsoft.
With more than 160 million subscribers worldwide, Netflix’s success has been bolstered by the launch of popular original shows, released after self-isolation modes were introduced around the world. For example, one of the reasons for the rise of Netflix is the sensational novelty of the service – the documentary series “King of the Tigers”.
Competitors to the service, such as Amazon Prime Video, estimated at 118 million users, and the new Disney streaming service, also benefited from the coronavirus pandemic, due to which the services were able to increase the influx of new users. So, the number of subscribers to the new streaming service Disney Plus, since the launch five months ago, has exceeded 50 million. Disney initially set itself the goal of reaching 60-90 million subscribers by the end of fiscal year 2024. Disney Plus is now outpacing growth.
Analysts believe that streaming services will continue to grow and increase the number of subscribers for a considerable time, as many consumers are now changing their habits and it is streaming that has instantly become a source of high-quality home entertainment instead of closed cinemas.
Disney was able in 5 months to achieve what Netflix took 7 years
The demand for streaming services was so huge that Netflix, Amazon Prime, YouTube, and the BBC agreed to lower video quality across Europe to ensure that broadband networks can cope with significantly higher levels of usage.
Netflix made its way into the popular acronym FAANG (Facebook, Amazon, Apple, Netflix and Google), which on Wall Street denote the most popular and efficient American technology companies. Amazon and Netflix investors seem to have removed concerns about the impact of the pandemic on Netflix content production in the United States. It is worth noting that Disney suspended the production of new content and delayed the launch of blockbusters like Mulan or Black Widow.
However, Disney, although losing in terms of capitalization, still demonstrates much higher growth rates than its competitors. This is largely due to the high quality of content from world famous studios – Disney, Pixar, Lucasfilm, Marvel and National Geographic. Experts say that Disney was able in 5 months to achieve what Netflix took 7 years. However, Netflix can be called a pioneer in the streaming industry. It was Netflix that changed the landscape of the media industry and forced eminent competitors to follow its path.
Meanwhile, ExxonMobil and other oil giants, including British companies BP and Royal Dutch Shell, were faced with falling stock prices when demand fell to its lowest level in 25 years.
The International Energy Agency (IEA) has warned that the largest oil production cuts in history will not be enough to offset a huge drop in demand to levels not seen since 1995. Earlier this month, ExxonMobil decided to cut capital expenditures more seriously (by 30%, while other companies talked about a 20-25% reduction) and abandon active development in the Permian shale basin in the USA, which the company had previously considered as a priority project. In particular, the company intends to reduce the pace of drilling and well development.
The company also plans to reduce operating costs by 15%.