Netflix

Netflix’s moat is multi-factor. Intangibles: a global brand associated with premium streaming, a growing portfolio of franchises, and a large catalog with data-informed curation.

The company’s scale in commissioning and marketing content across 190+ countries is hard to replicate and is reinforced by consistently high share of TV time according to Nielsen. Switching costs: although customers can cancel easily, household habits, profiles, watchlists, localized interfaces, and bundles with telcos create inertia.

Paid sharing enforcement segmented casual users into paying accounts, raising effective ARPU without materially impairing growth. Cost advantage: global amortization of content, a direct-to-consumer distribution stack, and now owned ad tech lower unit costs and increase monetization optionality vs most peers.

Content and marketing efficiency improved as operating margin rose from 21 percent in 2023 to 27 percent in 2024. Network effects: limited classic two-sided effects, but a soft data network effect exists as more viewing data enhances recommendations, commissioning, and ad targeting.

Ad reach scaling from 40 million to 94 million MAUs, and then the 190 million monthly ad viewers metric, increases platform attractiveness to advertisers. Efficient scale: Netflix is the leading SVOD in most major markets, and live rights like NFL Christmas and WWE Raw create differentiated programming windows.

Risks to moat durability include escalating sports rights inflation, competitor bundling, and generative AI reducing production costs for rivals, partially offset by Netflix’s distribution, brand, and data advantages.