In the early days of Netflix, co-CEO Ted Sarandos used to buck up his team responsible for filling the service with content by looking to the future.
“I used to try to get the team to wrap their head around the potential scale of the business by saying things like, someday we’ll be so big, we’ll have a VP of anime,” Sarandos recalled this week. “And then that someday is now.”
It’s true—Netflix hired Rob Pereyda last year as its first head of anime, the Japanese action cartoon genre.
And “that someday is now” as the company hit two huge milestones at the end of 2020. Netflix attracted more than 200 million paying subscribers. And, after spending billions and billions of other people’s money to cover huge deficits for the past decade, Netflix has reached financial self-sufficiency and created a sustainable entertainment juggernaut.
This must have been the vibe at Netflix HQ before the company announced its earnings on Tuesday afternoon:
Wall Street, as usual, focused on the small picture. How many subscribers did they add in the quarter versus how many did they say they would add versus how many did analysts predict on average they would add? (The answers, by the way, were 8.5 million, 6 million, and 5.9 million, respectively.)
But it was more the big picture that sent the stock zooming. Highlighted (or buried) on page 5 of Netflix’s quarterly earnings letter to shareholders was the revelation that the company would be cash flow positive this year despite spending close to $20 billion on new programming. And with $8 billion in cash on hand, that means “we believe we no longer have a need to raise external financing for our day-to-day operations.” Cash will be so plentiful that the company will even buy back some of its shares, a common price-supporting practice that Netflix hasn’t done since 2011. Even investors who haven’t watched a second of Bridgerton know that’s a positive.
Netflix stock, already worth over $500 billion, gained 14% in premarket trading on Wednesday morning to almost $574, within $2 of its all-time high. Although it jumped 67% last year as a leading member of the pandemic portfolio, the stock had previously lost 7% so far in 2021.
There was another change, more in tone and approach, highlighted in the shareholder letter. Netflix used to be known as the studio that wouldn’t share viewership numbers and wouldn’t tell even stars and producers how well their shows and movies performed. But now there’s data galore. Midnight Sky, the George Clooney-directed dystopian sci-fi thriller, attracted 72 million households in its first four weeks. Less-well-reviewed holiday flick Holidate starring Emma Roberts drew 68 million households. And the new favorite in the Pressman household, the French miniseries Lupin starring Omar Sy released this month, is projected to exceed 70 million in its first four weeks.
C’est magnifique!
Aaron Pressman
@ampressman
aaron.pressman@fortune.com
NEWSWORTHY
Biff, boom, POW! Speaking of anime and such, the South Korean comics powerhouse Naver, which owns the site Webtoon, will pay $600 million to acquire Wattpad, where the kids go when they want to write their own comic book stories.
The un-invisible man. Jack Ma, the founder of Chinese Internet giant Alibaba, appeared in public for the first time in two months, eliciting a sigh of relief from worried investors. Shares of Alibaba gained 9%. Appearing at an annual charity event celebrate rural educators, Ma did not explain his long absence. And on the subject of elusive tech billionaires, Tesla says it's hiring a social media specialist whose job, in part, will be to "address social media escalations" directed at @ElonMusk.
Crypto only happens when it's raining. Incoming Treasury Secretary and former Fed chair Janet Yellen offered a pretty negative view of cryptocurrencies at her nomination hearing on Tuesday. Asked about terrorists using digital currency, she replied: "I think many are used, at least in a transaction sense, mainly for illicit financing and I think we really need to examine ways in which we can curtail their use and make sure that anti-money laundering doesn’t occur." And another crypto skeptic, MIT professor and former CFTC chair Gary Gensler, is the incoming Biden administration's pick to head the Securities and Exchange Commission.
Person, woman, man, camera, pardon. In one of his last acts as president, Donald Trump issued a pardon to former Google self-driving car wiz Anthony Levandowski. Levandowski, who had defected to Uber and brought along some purloined data, pled guilty last year to stealing trade secrets and was facing 18 months in prison.
FOOD FOR THOUGHT
Reporter Monica Chin at The Verge noticed a hidden trend at virtual CES this year. Laptop makers are finally abandoning the goofy 16x9 aspect ratio that's great for watching movies but terrible for getting work done.
I can’t think of a mainstream consumer laptop company that isn’t now selling a non-16:9 flagship-level machine. It’s clear that companies across the board are moving toward laptops with taller aspect ratios, and I fully expect to see more of them in the years to come.
Again, this may seem like a boring change. But it will make a big difference in the lives of this year’s laptop buyers, particularly people shopping for a work-from-home device. I switched from a 16:9 laptop to a 3:2 Surface Book 2 back in 2017, and it was one of the best purchasing decisions I’ve ever made. If you’re using a 16:9 screen now and are looking to upgrade this year, I encourage you to give one of these new devices a shot. You won’t want to go back.
IN CASE YOU MISSED IT
Google takes action against another outspoken A.I. ethics researcher By Jeremy Kahn
Virgin Orbit satellite launch from a 747 kicks off a satellite launch boom By Aaron Pressman
TikTok parent Bytedance launches its own mobile payment service in China By Eamon Barrett
In Staples acquisition offer, Office Depot sees opportunity to exit retail By Phil Wahba
Men and women are networking very differently during the pandemic By S. Mitra Kalita
HP CEO: I just became an American citizen. More immigrants deserve the same opportunity By Enrique Lores
(Some of these stories require a subscription to access. Thank you for supporting our journalism.)
BEFORE YOU GO
Maybe Apple will build the coolest electric car ever, maybe Elon Musk's revamped Roadster will shock and awe, but neither will come close to the wacky and wonderful prototypes like the Toyota EX-II or the custom Manta Ray that you can peruse at the site Old Concept Cars. Take a roll on through.
