Michael Morris’ Insights on Netflix: More Runway Ahead or Just the Beginning?
Joining CNBC’s “Squawk on the Street,” Guggenheim Securities analyst Michael Morris shared his perspectives on the streaming giant, Netflix (NFLX). Morris believes that Netflix has more room to grow, both in terms of subscriber base and pricing power.
Subscriber Base Expansion
According to Morris, the addressable market for Netflix is enormous. “We estimate there are 1.5 billion households globally that can afford to pay for streaming services, and Netflix has only penetrated about 150 million of those households,”
he stated. This leaves plenty of room for Netflix to expand its subscriber base.
Pricing Power Around the World
Morris further discussed Netflix’s pricing power, stating that the company has demonstrated its ability to raise prices in developed markets like the US and Canada. However, the analyst believes that Netflix still has room to grow in emerging markets, such as India and Africa, where prices are currently lower.
Impact on Consumers
For consumers, this means that Netflix may continue to raise prices in various regions, providing the company with more revenue to invest in content production and distribution. However, this could potentially lead to increased costs for consumers, who may need to adjust their budgets accordingly.
Impact on the World
On a larger scale, Morris’ optimistic outlook for Netflix could have significant implications for the global media landscape. With the continued growth of streaming services and the decline of traditional TV, traditional media companies may need to adapt or risk being left behind.
Additional Insights from Other Sources
According to a report by Statista, the number of streaming subscriptions in the US is projected to reach 318.7 million by 2027. This represents a significant increase from the 176.3 million streaming subscriptions in 2020.
Moreover, a recent report by ResearchAndMarkets.com suggests that the global streaming media market is expected to grow at a CAGR of 18.4% from 2020 to 2025. This growth is attributed to several factors, including the increasing popularity of streaming services and the increasing demand for on-demand content.
Conclusion
In conclusion, Michael Morris’ bullish outlook on Netflix highlights the significant potential for growth in the streaming industry. With a massive addressable market and the demonstrated ability to raise prices in various regions, Netflix is well-positioned to continue expanding its subscriber base and increasing revenue. However, this growth may come at a cost for consumers, who may need to adjust their budgets to accommodate higher streaming prices. On a larger scale, the continued growth of streaming services could have significant implications for the global media landscape, forcing traditional media companies to adapt or risk being left behind.
- Netflix has significant room to grow, with an estimated 1.35 billion addressable households worldwide
- The company has demonstrated pricing power in developed markets and is poised to expand in emerging markets
- The streaming industry is projected to continue growing, with the number of streaming subscriptions in the US expected to reach 318.7 million by 2027
- The global streaming media market is expected to grow at a CAGR of 18.4% from 2020 to 2025
