Economy and Chill
Imagen Munkhbayar
Professor Kahn
JOUR 469
31 August 2021
Pawns and pills. Royalty and reality. Demogorgons and dances. When the world shut down, streaming platforms provided a euphoric escape for viewers to a universe of 1080 HD and binge watching. Consumers racing to streaming platforms contributed to Netflix’s current count of 75,000,000 subscribers. Each subscriber paid a minimum fee of $8.99 a month for full access to the platform’s extensive library of documentaries, films, and series, even as the nation’s GDP fell close to 35% in its second quarter in 2020.
*NETFLIX’s stock price history since conception from the Macrotrends Research Platform
As an admitted full-time resident at movie theatres, the coming realization that movie tickets were being traded for subscription packages was a prospect I was hesitant to explore. My screen time now logs an average of 3 hours a day spent on the app and if I were to travel back to mid-2020, those numbers would only further conceptualize Netflix’s handle on my daily life. Similarly, the United States’s economy and reports on consumer spending indicate a growing relationship with the corporation.
*2017 marked an all time low in movie ticket sales for traditional movie theatres according to Bloomberg and Business Insider but this was, of course, surpassed in 2020.
Steady numbers driven in part by promising partnerships with Xbox and other platforms, while the world choked in 2008, indicated the company’s ability to thrive in extreme circumstances. A recent report by Charles Riley of CNN Business, indicated that the global enterprise took a hit of 433,000 subscribers in the second quarter of 2021 while the nation’s GDP contrastingly posted an increase of 13%. Netflix’s own report demonstrated a drop in share price further identifying it with the company’s overall stunted growth. With more people going back to work or school and returning to their busy lives, Netflix saw a depreciated market growth as subscribers pulled away. An official statement by Netflix in response to the media stated that “the industry has consolidated materially over the years, and we [Netflix] don’t believe this consolidation has affected our growth much, if at all.” So, while leading competitors such as Warner, Disney, Hulu, and Amazon have launched their streaming services in recent years, Netflix remains unfazed and unbothered.
The company’s continued developments into original content production has already reaped accolades from the Academy Awards, Emmy Awards, and Golden Globe Awards (say that ten times fast). Netflix’s history has shown the turbulent but skyrocketing progress through its inverse relationship with the United States’s economy. 2008 showed us that Netflix’s subscription increased, the economy suffered a major loss. Being able to escape from your worries through one’s favorite shows is what makes Netflix so dependable and attractive to American consumers. On the other hand, as the United States bounced back from a pandemic with startling growth in the nation’s GDP, Netflix was shown with consecutive reports of depressed numbers in the year’s second quarter. However, I doubt that the minor setback will derail Netflix’s domination of the film and production industry, just hopefully not at the expense of an economic shutdown. A plot twist and happy ending for Netflix and the U.S. economy is all I ask for.
https://www.bea.gov/system/files/gdp2q21_2nd_homepage.png
https://blog.hubspot.com/marketing/companies-that-thrived-during-the-recession
https://www.macrotrends.net/stocks/charts/NFLX/netflix/stock-price-history
https://tippie.uiowa.edu/sites/tippie.uiowa.edu/files/documents/krause/s17_nflx.pdf
https://www.cnn.com/2021/07/21/investing/premarket-stocks-trading/index.html
