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
Olivia Colman in Netflix's The Crown: will it be a hit for investors too?

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.

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.

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.

Recommended

How long can the good times roll?
Economy

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
The British equity market is shrinking
Stockmarkets

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
I wish I knew what a share was, but I’m too embarrassed to ask
Too embarrassed to ask

I wish I knew what a share was, but I’m too embarrassed to ask

When people talk about investing, they often refer to putting money into “shares”, or buying “stocks and shares”. But what is a share anyway?
28 Oct 2020
Robin Geffen: dividend cuts aren't all down to Covid
Stockmarkets

Robin Geffen: dividend cuts aren't all down to Covid

The seeds of recent dividend cuts and cancellations were sowed many years ago, says veteran investor Robin Geffen.
25 Oct 2020

Most Popular

The Bank of England should create a "Bitpound" digital currency and take the world by storm
Bitcoin

The Bank of England should create a "Bitpound" digital currency and take the world by storm

The Bank of England could win the race to create a respectable digital currency if it moves quickly, says Matthew Lynn.
18 Oct 2020
Don’t miss this bus: take a bet on National Express
Trading

Don’t miss this bus: take a bet on National Express

Bus operator National Express is cheap, robust and ideally placed to ride the recovery. Matthew Partridge explains how traders can play it.
19 Oct 2020
Three stocks that can cope with Covid-19
Share tips

Three stocks that can cope with Covid-19

Professional investor Zehrid Osmani of the Martin Currie Global Portfolio Trust, picks three stocks that he thinks should be able to weather the coron…
12 Oct 2020