The winner of our corporate Baftas – the greatest companies of the past decade

Share price and sheer market clout has made video-streaming service Netflix the stand-out star of the stock titans in 2019, says Matthew Lynn.

Olivia Colman in Netflix's The Crown © Netflix

What was the greatest company of the past decade? You could make a case for Amazon, of course, as the internet retailing powerhouse moved into devices, media, cloud computing and dozens of other businesses and made itself briefly the largest company in the world. Or Microsoft, as the company of the 1990s made a stunning comeback, reinventing itself as a services giant. Or perhaps Apple, Facebook, Uber. Maybe Alibaba or Tencent. There are perfectly compelling cases to be made for all of them. But the winner? It has to be Netflix. Let's see a clip of it in action.

The shares soar

But it is not just about the share price. It is about influence: Netflix has been the most disruptive firm this decade. It has turned not just one but two of the world's biggest industries upside down. Broadcasting has been transformed. Traditional terrestrial and pay-TV have both been left looking quaintly old-fashioned compared with the streaming giant and its conveyor-belt of high-quality, big budget TV shows. With a spend of more than $10bn a year on new productions, it has mastered the art of creating programming that people talk about. With the possible exception of HBO, no other company comes close. Even the film studios look lame by comparison. It has forced Disney, HBO and, in this country the BBC and ITV, into launching rival services.

Subscribe to MoneyWeek

Become a smarter, better informed investor with MoneyWeek.

but will profits ever roll in?

But Netflix's influence goes beyond that. With subscriptions and streaming it has created a whole new business model. Sure, people have always subscribed to things, such as newspapers and magazines, gyms or maybe a wine package. Netflix took it to a whole new level. It showed that customers are more than happy to pay a small monthly fee for unlimited access to a product they want. That model is starting to spread. We now get music from Spotify, razors from Harry's, books from the Kindle store. Pretty soon, instead of buying a car, we might just pay a monthly fee to use a ride-sharing app.

Netflix made it clear that streaming services is often a more powerful offering than selling things. And its mastery of the algorithms, data management and customer service needed to make that work smoothly means it may well turn into the most powerful player in the sharing/streaming economy. To take just one example, if the world moves to shared, driverless cars, then Netflix may have a lot more relevant expertise than either Ford or Toyota: building the cars won't be especially difficult, but getting the right one to your door on time will be.

Advertisement - Article continues below

True, Netflix still doesn't make any money. It has become brilliantly successful at taking lots of cash from Wall Street and giving it to TV producers, actors and writers. Whether it can do that profitably remains to be seen. Even so, there is no question its impact has been huge. It was the most influential company of the decade as well as the most rewarding for investors.




How long can the good times roll?

Despite all the doom and gloom that has dominated our headlines for most of 2019, Britain and most of the rest of the developing world is currently en…
19 Dec 2019
Stock markets

The British equity market is shrinking

British startups are abandoning public stockmarkets and turning to deep-pocketed Silicon Valley venture capitalists for their investment needs.
8 Nov 2019

Why Wall Street has got the US economy wrong again

The hiring slowdown does not signal recession for the US economy. Growth is just moving down a gear, says Brian Pellegrini.
25 Oct 2019
Stock markets

There are lots of reasons to be bearish – but you should stick with the bulls

There are plenty of reasons to be gloomy about the stockmarkets. But the trend remains up, says Dominic Frisby. And you don’t want to bet against the …
17 Jul 2019

Most Popular

Share tips

Class acts going cheap: buy into Europe’s best bargains

Value investing appears to be making a comeback, while shares on this side of the Atlantic are more appealing on metrics such as price/earnings ratios…
16 Jan 2020

Currency Corner: how is the New Zealand dollar doing against its US counterpart?

The New Zealand dollar has been doing well against the US dollar in recent months, but has started to wobble a little. Is it still a buy? Dominic Fris…
20 Jan 2020
Share tips

Share tips of the week

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
17 Jan 2020
House prices

UK house prices may be heading for a Boris bounce

The latest survey of estate agents and surveyors from the Royal Institution of Chartered Surveyors is "unambiguously positive" – suggesting house pric…
16 Jan 2020