business growth of Netflix

Netflix Prioritizes Business Growth with Selective M&A

Netflix (NFLX) is committed to driving growth in its business and is prepared to make strategic moves to achieve that goal, according to statements made by Netflix co-CEO Greg Peters during his appearance at the Goldman Sachs Communacopia and Tech Conference in San Francisco on Tuesday.


Peters, who shares the dual CEO role with Ted Sarandos, emphasized the company’s unwavering dedication to bolstering its core business operations. He explained, “Our top priority is to fuel the growth of the business by focusing on the core that we’ve been focused on for so long.” In addition to this core focus, Peters outlined a second-order component, where the company will actively seek out merger and acquisition (M&A) opportunities that align with their criteria.


Highlighting Netflix’s intention to be more discerning in its approach to M&A, Peters stated, “We’ve been very, very choosy about [deals] because we think that there’s a lot of opportunity.” He also acknowledged the complexity involved in pursuing M&A ventures compared to the relative simplicity of concentrating on the core business.


Reportedly, Netflix is exploring options in intellectual property deals and contemplating the acquisition of traditional Hollywood assets, including studios. In the past, Netflix has successfully acquired studios such as Australian animation studio Animal Logic and engaged in intellectual property deals, exemplified by its 2021 acquisition of the Roald Dahl Story Company. The streaming giant has also expanded its reach into the gaming industry with the acquisition of gaming studios in recent years.


Looking ahead, Peters identified content as the primary investment area where Netflix intends to double down. He asserted, “The biggest thing is if we can actually execute against the investments that we’re making already. That’s the highest leverage, most impactful thing you can do with what our users care about the most, and so we’re putting most of our energy and attention on making that better.”


Throughout the year, Netflix has maintained a vigilant focus on profitability while executing its investment strategies. This approach includes cost-cutting measures, combating password-sharing, and finding efficiencies in producing original content, as previously reported by Yahoo Finance’s Allie Canal.


Netflix’s strategy can be summarized as “wanting to take fewer swings but better swings,” as observed by Third Bridge analyst Jamie Lumley in a June interview with Yahoo Finance. Despite the challenges posed by a historic Hollywood strike and the associated rising costs, Netflix’s efforts have yielded positive results thus far.


The performance of Netflix stock reflects this success, with the company’s shares surging by more than 50% year to date and over 100% in the past 12 months. The dedication of Netflix to business growth is unmistakable, and its careful approach to mergers and acquisitions underscores its commitment to securing a leading position in the entertainment industry.

Source:Yahoo Finance

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