Netflix is officially the most valuable media company in the globe after it surpassed Disney's total valuation thanks to boosting of stocks to record highs yesterday. It came as no surprise considering that market people have been closely following the trend. Nevertheless, it's still a welcome development for Reed Hastings and his team over at the Los Gatos-based entertainment company.
Despite the snafu at Cannes 2018, which prohibited Netflix-Original movies to participate in the competition due to the ruling that requires films to be rolled out in French cinemas before they can be acknowledged as participants, Netflix continues to grow around the world. Currently servicing 125 million paying subscribers as of April, the streaming company is available in more than 190 countries. For the first quarter of 2018, the company has reportedly posted $3.7 billion in revenue and $290 million in net income - an impressive 63% increase from the previous year.
A report from Variety reveals that Netflix has officially passed Disney to become the world's most valuable media company for the first time. The streaming platform closed up 1.3% to $349.29 per share Thursday, with a market cap of about $161 billion. Meanwhile, Disney's stocks fell 0.7%, closing at $102.11 per share, and resulting in a $152 billion market cap. Just a day prior, Netflix surpassed Comcast's market cap.
It's curious if the announcement that former President Barrack Obama and former First Lady Michelle Obama will be producing content for the streaming giant has anything to do with investors' positive outlook of Netflix. Earlier this week, it was reported the power couple signed a deal with the company to produce original content that will include anything from scripted series to documentaries. The Obamas plan to use the platform to encourage and inspire the nation by sharing their personal experiences - whether it's about their family life or their work as public servants. Considering the massive popularity of the couple even after their White House stint, it's safe to say that this collaboration has somehow helped in boosting Netflix's stocks.
Netflix has been hard at work in producing original content to offer their patrons more than just a platform to catch up with other studios' films and companies - especially since Disney is gearing to roll out their own streaming service next year that would offer people films from huge studios like Marvel, Pixar and Lucasfilm. Over the last few months, it has struck a deal with several creatives like Coen brothers (who are working on The Ballad of Buster Scruggs), Shonda Rhimes, Guillermo del Toro. Meanwhile, they also purchased in Mark Millar's Millarworld: the comic book company behind such successful comics-turned films as Kickass and the Kingsman franchise last year.
That said, Netflix's commitment to have around 1,000 original content by the end of the year has come with a price. The company has racked more than $24 billion worth of debt ($.6.54 billion in long-term debt plus $17.9 in content payment responsibilities). Back in March, it signed its biggest debt financing deal amounting to $1.9 billion.