Image Credit: Mark Bonica
A:Netflix is a dominate player in television/movie streaming and home mailed DVDs. The company was launched in 1997 using pay-per-rent for its mailed DVDs. In 1999 the company started its subscription based DVD service that evolved into the DVD mailing service that is offered today.
Netflix’s streaming service that is extremely popular today was not introduced until early 2007. By this time, Netflix had shipped out over one billion DVDs to their customers. Today, the company has over 100 million subscribers and that figure is growing.
Interesting, Netflix offered itself up to Blockbuster in 2000 for $50 million. In a fatal mistake, Blockbuster declined the offer and later went bankrupt in 2010 largely due to brutal competition from Netflix, Redbox, and other rival services.
So, who owns Netflix? Netflix is a publicly traded company. It trades under the stock symbol NFLX on the Nasdaq. Since Netflix is publicly traded, it is owned by the numerous shareholders of the stock. Ownership ranges from small individual investors to large institutional investor who own millions of shares.
Over 85 percent of the stock is held by institutions with the top holders being Capital Research Global Investors, Vanguard, Blackrock, FMR LLC, State Street Corporation, and T. Rowe Price.
Three of the largest shareholder of Netflix are the CEO/Co-founder Reed Hasting, Jay Hoag who is one of the founders of Technology Crossover Ventures and a board member of Netflix, and former Chief Product Officer Neil Hunt. According to the 2017 Netflix proxy statement, Hastings owns approximately 11.8 million shares, Hoag has about 6.4 million shares, and Hunt holds around 1.3 million shares .
To become an owner (investor) in Netflix, you simply buy shares of NFLX through a broker. The common way to buy Netflix stock is through an online broker such as Fidelity, Ally Invest, Ameritrade, ETrade, or any other of the various reputable online brokers. Of course there is a risk of loss just like any other stock investment. You should do ample research before investing in Netflix.
The company does not pay dividends because it is using its earnings to fuel growth with added programming and subscription expansion. The company has recently commit over $15 billion to streaming content. This greatly explains why the company recently raised membership prices for customers. The company needs to keep adding compelling programming to entice additional subscribers and retain existing members. Essentially, the company’s ability to make money hinges on the success of its content.