As coronavirus keeps people indoors, Netflix’s weakness — its total reliance on streaming memberships for revenue — has become its strength as it hit a two-year high in the market on Tuesday while other media companies fret over lost advertising dollars and shut movie theaters.
The stock closed at more than $413 per share, its highest price since July 2018.
Netflix, which has had trouble in the past year growing its membership base in the U.S., saw a spike in new subscriptions once social distancing measures were introduced across the country, according to data from streaming analytics firm Antenna.
Roku, which also got a boost in the market today, announced Monday that it saw a 49% year-over-year increase in streaming between January and March.
Netflix was not always immune to coronavirus’ effects — it dipped in the market in mid-March, briefly falling under $300 per share.
34.3 million. That is how many people Nielsen estimates watched Tiger King, the true-crime miniseries about private zookeepers that has become a sensation. However, splashy new content may not be the only key to Netfliix’s success. “Tiger King gets lots of focus,” says Lightshed partner and analyst Rich Greenfield, “but there is a very deep library that people are diving through right now.”
Like the rest of the entertainment industry, Netflix NFLX has had to halt production. In the short term, that is not such a bad thing for them, says Greenfield. It is spending less on content while they get more subscribers, freeing up cash flow and making the company more profitable.