Netflix is arguably the largest streaming service. They’ve been in the game for a while, and are still going strong. Unfortunately, you can’t buy their shares from the Australian stock exchange.
No need to fret, online brokers are available. We not only talked about how you can purchase them, but discussed whether working with the company is worth it or not.
Netflix Australia – Overview
Unless you’ve been living under a rock, you would have heard of Netflix. The company was founded in 1997 by Reed Hastings and Marc Rudolph, in Los Gatos, California. They began by renting DVDs.
They started the shift to the company we know and love by 1999. They got rid of their renting services and decided to offer DVDs on subscription.
By the summer of this year, Netflix became the world’s largest entertainment company. As mentioned, they are a part of FAANG. This is an added incentive to invest in them.
|Founding date||August 29, 1997|
|Founders||Reed Hastings & Marc Rudolph|
|Users||195 million (October 2020)|
|Headquarters||Los Gatos, California, US|
|Countries available||Worldwide, except for Crimea, China, North Korea & Syria|
Where to Buy Netflix Shares?
To get hold of FAANG shares in Australia, you’ll need to work with a trading platform. We’ve discussed 3 of the best.
Pepperstone has been around much longer than HFtrading. It’s also regulated well. They are authorized by the Financial Conduct Authority, the Australian Securities and Investment Commission, as well as the Dubai Financial Services Authority.
You don’t have to be an Australian to work with them. They accept users from all across the world.
Like HFTrading, they make use of MetaTrader 4. That’s why their systems look good. You’re getting a mobile app too.
They’ve won awards for their customer support. It is 24/5 – you don’t have to worry about not getting help.
To work with them, you need to make a minimum deposit of $200. There are commissions charged, but this depends on your payment method and they’re quite low.
A thorough resource guide is available. There are also expert analysis tools, trends, and forecasts offered.
In terms of the assets, you’re getting, global stocks, cryptocurrency, indices, metals, energies, bonds, CFDs, and ETFs. However, they started off trading Forex, and they’re well- known for it.
Plus500 is regulated by several bodies. CySEC, the Financial Conduct Authority, and the Australian Security and Investment Commission are just a few of them. Sadly, the service is not available to US citizens.
They have an educational center. But it’s not as thorough as the others mentioned above.
You can trade over 2000 instruments, though. There’s also expert customer service if you need help.
Like any good trading platform, a mobile app is present. An extensive variety of tools and trends are available as well.
Thankfully, no commission is charged. Their minimum deposit is also quite low. You’ll just need to include $100.
You don’t have to worry about safety. The platform is regulated by the Australian Securities and Investment Commission, as well as the New Zealand Financial Markets Authority. Unfortunately, they’re only available to users from these two nations.
They came into being in 2019. Using their site is very easy, as it’s clutter-free and fast. There’s a mobile trading app as well.
If you’re not only interested in Netflix shares, you should know that they offer other assets too. You can invest in forex, Cryptocurrency, Commodities, Indices, CFDs, and other global stocks. In total, 750 different asset classes are present.
You don’t have to be an expert trader – they offer a thorough education system. There’s also 24-hour assistance. The broker’s support team is known to be informative and helpful.
Studying the market is easy as thorough analytical tools are available. You can even get trends and forecasts. What type of trading platform do they use? The sophisticated MetaTrader 4.
The cherry on top is the fact that no commissions or fees are charged. That being said, a minimum deposit of $250 is needed.
What Should You Consider When Buying Netflix Shares?
This section looks at what you should know when choosing a broker, and a few things to keep in mind about the company.
Aim to use the brokers recommended on this list, as they’re some of the best in the game. You need to be careful to choose a reliable broker as there are quite a few scams out there. These usually offer outstanding returns. Thankfully, there are many reputable brokers from whom you can buy Netflix shares in Australia.
You might have to pay broker fees, as well. Depending on the site you’re using, the amount you’ll have to pay would differ. If you’re not careful, you could end up spending too much.
The Streaming Service
Before working with them, know that they are hard to value. Even minor factors could affect how much they’re worth. Membership growth, margins, and revenue per user affect the timing of cash flow.
Although Netflix has come so far that it’s hard for rivals to catch up, they’re still trying. Amazon Prime and Hulu are their biggest competitors. With new names like Disney+ and NBCUniversal joining the game, the slightest mistake from Netflix could lead to a crash.
Cost of Production
Buying the rights to various media and distributing them is more affordable than producing shows. That being said, Netflix keeps diving into the latter. Production can cost millions of dollars, and the streaming service won’t know if it was worth it or not months until the show has aired.
As Disney+, Hulu and other streaming services have also started to create their own shows, the pressure on Netflix to produce quality content has been high. They’ve been spending more on the productions of these shows and their debt financing is $15.5 billion.
Why Should You Buy Netflix Shares?
As you can imagine, there are many reasons why you should work with them. Let’s look at some of them.
Superior Operating Margins
One of the reasons Netflix is growing is because they’re expanding their operating margins. This refers to how efficient their operations are – they’ve been spreading costs amongst their subscribers.
The model is common in the tech industry. Giants like Microsoft Corp, Alphabet Inc., and the Alibaba Group have been using it.
Netflix’s goal is to be part of every home. They’ve almost done this in the United States. They boast over 73 million US subscribers. This is impressive considering how there are only 128 million households in the country.
Although they have plans for expanding in the US, their focus is on rising in popularity abroad. They tried this in 2016 and were available in almost every country except for the few mentioned. It was a success as their international member base jumped from 27.4 to 122 million.
The streaming service has been producing content with specific cultures and customs in mind. They’ve even adjusted their plans according to the countries that use their services. A good example of this is India, where they issued a lower subscription tier, which is available for mobiles online.
Reed Hastings is known to be an amazing leader across the tech and entertainment industries. Several Silicon Valley names have alluded to how competent and driven Hastings is. Companies that are led by their founders have also been shown to prosper. After all, it is their child.
Not only has Hastings been there since day one, but so has Ted Sarandos. He has been a part of the streaming service since 2000. Until recently, he was their Chief Content Officer. Hastings made him Co-CEO because of his long service.
His leadership has led to the company taking many risks including the distribution of DVDs instead of VHS tapes, the shift to streaming, as well as the production of the company’s own content. As mentioned, they’ve been customizing their services to specific nations, such as adjusting their payment plans to seize the Indian market.
Due to his vision, other streaming services don’t have the funds or the capacity to match up to Netflix.
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A Steady Flow of Content
Many people flock to the service because they produce their own TV shows and movies. Due to the coronavirus pandemic, production was paused. This might make you think that investing in a company is a bad idea.
This is not the case. Netflix has produced and stored a myriad of content and continues to keep the masses entertained with new TV shows and movies during the global lockdown.
As discussed above, the streaming service has grown rapidly throughout the years. We talked about how this was due to Hastings’ smart leadership. If you’re trying to decide whether to buy its shares, know that it added 26 million new subscribers in the first 6 months of this year alone.
Competitors can’t come close, especially since their services are not as widely available throughout the globe. Disney+ wasn’t available in Australia and New Zealand until the end of 2019.
Although they went through a few ups and downs, by 2002, they were shipping 190,000 discs a day to almost 700,00 subscribers. By the fourth quarter of that year, the number of users on the platform grew to 1 million. It increased to around 5.6 million by the third quarter of 2006 and 14 million by the spring of 2010.
Their rise in popularity was thanks to the expansion of DVD players in the US – and Netflix smartly capitalized on it. One of the ways they did this was by creating an affiliate DVD program.
They introduced their streaming service in 2007. In 2011, they made the wrong move and began to charge customers separately for using it. This caused them to lose 800,000 subscribers by the Q3 of 2011. They were expecting more losses by the fourth quarter. However, as they increased the price to access streaming, their income jumped by 63%.
As of October 2020, they boast over 195 million subscribers. 12.3 million of this number alone are from Australia, and 73 million from the US. Their services were not available worldwide, but they took a major step to change that in 2016. They currently are available in every country except for Syria, North Korea, Mainland China, and Crimea.
Not only do they distribute content, but produce it too. In 2016, they released 126 original series. This was more than any competitor around.
Is Now A Good Time to Buy Netflix Shares?
The sooner the better. But now is a good time to invest in them. Let’s dive into how they performed this year.
By the third quarter of 2020, their subscriber count grew by 2.2 million. They were at 195.15 million by Q2. Thanks to the global pandemic, stay-at-home orders meant that people had more time to go online. This led more people to signing up for their services.
However, even before the pandemic, their popularity was growing rapidly due to many people’s dislike of cable TV. This is not only a more expensive option but an inconvenience since users have to pay separately for different channels.
What’s more, their stocks have been doing very well. In September, the streaming service earned $1.74 per share, from the sale of $6.4 billion. On a year-to-year basis, their earnings have grown by 18%.
For the Q4, they are forecasting that they would be able to offer $1.35 per share, from the sale of $6.57 billion.
As you can see, buying Netflix shares is a good move and you can do so through a good broker. There are many options available, but consider those mentioned above as they are some of the best. If you look at their track record, it’s the best time to invest.
Frequently Asked Questions: Buying Netflix Shares in Australia
Which online brokerage platforms allow the purchase of Netflix shares?
Some popular Australian online brokerage platforms that allow the purchase of Netflix shares include eToro and Plus500.
What is the minimum investment required to buy Netflix shares?
The minimum investment required to buy Netflix shares depends on the online brokerage platform you use, but it can range from as little as $1 to over $1,000.
How do I evaluate the potential of Netflix as an investment?
You can evaluate the potential of Netflix as an investment by analyzing the company’s financial performance, growth prospects, industry trends, and competitive landscape.
What factors should I consider before investing in Netflix?
Some factors to consider before investing in Netflix include the company’s financial health, growth potential, competition, and industry trends.
Are there any risks associated with buying Netflix shares?
Yes, there are risks associated with buying Netflix shares, including market volatility, competition, changing consumer preferences, and regulatory risks.
What is the expected return on investment for Netflix shares?
The expected return on investment for Netflix shares depends on various factors, such as the purchase price, the holding period, and the company’s financial performance.
How do I track the performance of my Netflix shares?
You can track the performance of your Netflix shares by monitoring their daily stock price movements, reviewing the company’s financial reports, and following news and industry updates.
How do I sell my Netflix shares if I decide to do so?
To sell your Netflix shares, you need to log in to your online brokerage account, select the shares you want to sell, choose the order type and price, and submit the order.