1335 ET - Netflix's high subscriber count provides the streaming service with the ability to spend more on content. "Because it has more content, it drives better engagement, leading to more subscribers and possibly better pricing power in a virtuous cycle," MoffettNathanson analysts--describing what they dub "the Netflix flywheel"--say in a research note. Looking forward, the analysts believe Netflix can continue to add new users, in part because of the launch of its lower-priced ad-tier. Advertising, also, "should unlock a new runway of growth in the business for years to come," they add. An even higher subscriber count, combined with new revenue from ads, will "drive margins higher without any ceiling in sight." Shares rise 4% after MoffettNathanson upgrades Netflix to buy and raises its price target. (connor.hart@wsj.com)
(END) Dow Jones Newswires
March 17, 2025 13:35 ET (17:35 GMT)
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