Is Netflix the Perfect Recession Stock?
Netflix (NASDAQ: NFLX) has changed the media landscape, not once but twice. First it altered the way consumers rented DVDs and then it basically helped to create the streaming business. Both times it used a subscription model. And that model is what makes this company so resilient during economic downturns. It could be the perfect recession stock, but does that make it worth buying today?Netflix basically provides the software platform through which consumers can stream media. It charges monthly fees to consumers for the use of the platform. The subscription revenue it generates is used to pay for the content that Netflix offers on its service. In the early days, the company was busy building its software offering and spent heavily on content to attract consumers. But it has now gained enough scale that it is a sustainably profitable business.Image source: Getty Images.Continue reading
Netflix (NASDAQ: NFLX) has changed the media landscape, not once but twice. First it altered the way consumers rented DVDs and then it basically helped to create the streaming business. Both times it used a subscription model. And that model is what makes this company so resilient during economic downturns. It could be the perfect recession stock, but does that make it worth buying today?
Netflix basically provides the software platform through which consumers can stream media. It charges monthly fees to consumers for the use of the platform. The subscription revenue it generates is used to pay for the content that Netflix offers on its service. In the early days, the company was busy building its software offering and spent heavily on content to attract consumers. But it has now gained enough scale that it is a sustainably profitable business.
Image source: Getty Images.
