👉 Background: Netflix started as a DVD rental service in 1997 and has grown into the world’s biggest subscription service in over 190 countries. We're talking Squid Game, Stranger Things, Wednesday and even KPop Demon Hunters (yep, it's a real thing).  

👉 What happened: Netflix just announced its revenue for the most recent quarter reached over $11 billion USD - a casual 16% jump in revenue. While Netflix doesn’t report on subscriber numbers anymore, its subscribers streamed 95 billion hours in the first half of this year. That’s enough time to watch Suits from start to finish… about 18 million times over.

👉 What else: Despite these impressive results, Netflix’s share price got whacked. While Netflix raised its full year revenue forecast, it also plans to invest heavily in original content, which is going to hit their bottom line hard. But Netflix’s CFO reckons building assets, rather than buying them, is the only way forward.

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‍What's the key learning?

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‍💡When you own the show, you don’t have to keep paying to rent someone else’s content. That’s the strategic shift that Netflix has made.

💡Most streaming platforms start by buying or licensing content. They pay big bucks to licence popular shows or movies so they can quickly build a catalogue… like when Netflix paid $100 million to licence Friends. But over time, this strategy gets expensive, and these licensing deals often come with an expiry date. This means you’re constantly forking out money without building any long-term value.

💡By creating its own hit shows Netflix is building a library it fully owns. For example, Squid Game 3, an original series, has racked up 122 million views in just a few weeks. So while Netflix investors are worried about costs, the company has shown time and time again that original series' can pay off big time.