By Hernan Lopez.
Companies mentioned: Amazon, Disney, Fox, Netflix, Paramount, Peacock, Spotify, WBD.
Questions answered: How much is a Netflix Standard with Ads sub worth? What drives the gap between Customer Lifetime Value and Enterprise Value per Sub?
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Netflix kicks off the Q3 Streaming and Social Earnings season on October 21st. As of last Friday, its Enterprise Value stood at $524B, or about $1,650 per subscriber, based on Q3 consensus estimates of 317M subs.
When the company stopped reporting subscriber numbers, it explained that “memberships are just one component of our growth.” More importantly: “as we’ve evolved our pricing and plans from a single to multiple tiers with different price points depending on the country, each incremental paid membership has a very different business impact.”
Since then, I’ve been wondering: can we quantify “very different”? And what are the implications for the entire streaming ecosystem?