How Netflix can become the first $1 trillion media company

Mark Douglas, CEO of MNTN, joins TheStreet to explain why he thinks Netflix could become the first $1 trillion media company.

Transcript

00:00So there are estimates out there that Netflix could become a trillion dollar company by 2030

00:07Does that make sense to you?

00:09Absolutely makes sense to me and there's a few reasons why so I can articulate them. So one is

00:17Organic growth they continue to grow, you know for their scale pretty rapidly

00:22So that's one reason the second reason is and I think this is the most unique

00:27They're building a backlog of revenue every time they add a new subscriber

00:31So half of their subscribers now subscribe to the ad supported plan

00:36So they are adding those subscribers at a much faster rate than they're monetizing them

00:42and so that's creating this huge backlog of revenue that they'll

00:47unlock in two to three years when they finally fully figure out how to how to do ad supported programming and how to

00:54Monetize it and that backlog of revenue. I think it's going to create tremendous

00:59Growth on the top line for the business and more importantly, it's going to create tremendous profit margin growth for them

01:06So you take basically and then we're seeing that margin growth already, you know

01:11Basically half the customers are coming in at the lowest price point yet

01:15Netflix seems to be coming more profitable every quarter. So just stack all that up organic growth

01:22Backlog of revenue from all the ad support people signing up the ad support

01:26They're not actually really receiving ads yet and their margin growth from both of those and I think it does lead to

01:33Netflix becoming the first trillion dollar media company

01:35So it's Netflix that like next ad behemoth that we should be looking out for

01:40They have the app. I think yes, they have the opportunity to be that I think Disney is

01:47probably the largest, you know kind of

01:50Advertising media company in the space so, you know, they get to Disney scale is gonna take some effort

01:55But I think Netflix also has global scale which Disney doesn't fully have

02:01But so they're definitely gonna be the next one, but they have a lot of execution they have to do to get there

02:05They're really good at execution. And I think if I I would go, you know, you can go long on the stock

02:11I would go super long