Abstract

The media and entertainment industry in the United States has been steadily growing for many
years. The purpose of this study is to investigate financial performance of media companies in
USA that is Disney and Netflix by determining the current share prices of US media businesses
and find whether they reflect their intrinsic value of the company, determine the strength of
competition facing the Netflix and Disney company and determine the availability of current
investment possibilities to improve the performance of the company. The study will use both
qualitative and quantitative data by focusing on online surveys as well as the company reports.
The collected data will then be analyzed using simple statistics. The data will be evaluated with
the help of a statistical package for social sciences software programmer. The results will then be
created and displayed as graphs, tables, and charts displaying frequencies and percentages.

INTRODUCTION

BACKGROUND OF THE RESEARCH

The media and entertainment industry in the United States has been steadily growing for many
years. The goal of this research is to see if the present share prices published by the top firms,
Disney and Netflix, accurately reflect their intrinsic value and which companies are worth
investing in. Netflix, Inc., founded in 1997, is an American supplier of on-demand Internet
streaming movies available to users. Netflix began filming from Disney in 2011. Netflix also
offers current and back-catalog Disney-ABC Domestic Television shows. Netflix is one of the
most popular subscription-based streaming services on the market.  This platform which has over
193 million members, is the most popular subscription-based video streaming platform on the
market followed by Amazon prime with over 150 million customers (Moskovitz, 2020). Netflix
is present in more than 190 countries and offers a diverse selection of movies, TV shows,
cartoons, and documentaries in a variety of languages. Users can choose from a number of
genres to watch without having to watch advertisements on the platform. Netflix expanded its
market position in the first quarter of 2020, adding a record 15.8 million new subscribers. This
research is helpful in knowing the position of the company and make investment decisions basing on the
company analysis. Investing wisely can lead to tremendous beneficial improvements in our lives.
Obtaining the needed wisdom, on the other hand, may prove difficult for those charged with
managing a capital.
CONTEXT AND RESEARCH ISSUE

Netflix is faced with major risks from industry newcomers like Amazon and Google, with a projected rate
of growth of 20.4 percent annually in services of video-streaming services. Netflix will be able to adjust
their existing strategy to a highly competitive business with new market entrants if they have a thorough
understanding of the elements impacting consumer behavior when it comes to on-demand streaming
platform choice.

RESEARCH JUSTIFICATION

In 2020, the global video streaming market is estimated to be worth $51.61 billion, with a compound
annual rate of growth of 20.4% expected over the next seven years (Video Streaming Market, 2019). As
a result of this tremendous market expansion, video streaming 3.com platforms have a significant
opportunity to expand in order to improve revenue, profitability, and market share allowing platforms
like Netflix to extend their present 130 million subscriber base (Vikash, 2019). In order to capitalize on
such opportunities, it is necessary for prominent companies in the industry of video-streaming services
(e.g., Netflix) to have a deeper understanding of the fundamental incentives that lead customers to
acquire specific streaming services. Understanding the fundamental factors that impact which streaming
platform customers pick, such as people who subscribe to Hulu rather than Netflix due to local
preferences, is crucial for establishing the complete range of reasons why different consumer consider
alternative services. The on-demand streaming video sector, consumers have a lot of negotiating power,
which exposes the new market entrants’ threat with a lot of money (like Disney). As a result, Netflix will
be able to better understand what changes they need to merge their current as well as future content,
and advertising & pricing strategies that can be tweaked to ensure their target market needs and wants
are met, using a combination of primary and secondary research data.

PURPOSE OF THE STUDY

The purpose of this study is to investigate financial performance of media companies in USA that is
Disney and Netflix.

RESEARCH Objectives

1. determine the current share prices of US media businesses and find whether they reflect

their intrinsic value of the company.

2. Determine the strength of competition facing the Netflix and Disney company.

3. Determine the availability of current investment possibilities to improve the performance

of the company.

LITERATURE REVIEW

CURRENT SHARE PRICES OF US MEDIA BUSINESSES

According to Abigail's Netflix research, Netflix is the world's top internet streaming service,
distributing movies and television episodes across a wide range of genres (Yaney, 2010). Netflix
has hit significant milestones in its development since its inception. Netflix is organized into
three main business groups. International streaming, domestic Digital Video Disc (DVD), and
domestic streaming are among them. Domestic streaming refers to programming that is
exclusively available US members. International streaming refers to content delivery to members
outside of the US. Domestic DVD refers to the mailing of content DVDs to subscribers in the
United States. Bell and Ondracek carried a study on Managing and Strategizing in companies whereby
they picked Netflix company. they found that Netflix integrates low cost and differentiation strategies to
create a sustainable competitive advantage. Netflix has been able to differentiate themselves from their
competitors by producing original content. However, like many firms around the world, Netflix and the
streaming industry have been affected by Covid-19. Netflix has several key competencies that help
create competitive advantage for the company and they need to capitalize on those competencies.
Netflix’s current business model allows them to add on more services to expand their product offering
to customers. Without offering more products to customers Netflix will not be able to be the top
streaming service forever. Innovation is necessary for Netflix to stay alive during and after the COVID-19
pandemic.

Brudzinski, Gaenssle, and Lundstedt undertook an Empirical Analysis of Competition in Audio-

Visual Media Markets. They discovered. Controversy surrounds television, YouTube videos, and

Netflix streaming. Services like YouTube, in particular, are being questioned for imposing

competitive pressure against traditional television and Netflix. According to their findings,

YouTube imposes a notable pressure on both traditional television and Netflix for example,

through video entertainment at prime-time (Brudzinski et al 2020).

In their study, ALINA and SPENCER discovered that advances in artificial intelligence,

automation, and machine learning, combined with the increasing availability of big data, have

ushered in a new era of sophisticated, low-cost, and high-impact political warfare in their book

Russia, the West, and the Coming Age of Global Digital Competition. In the near future,

distinguishing between authentic and fraudulent audio, video, or internet identities will become

extremely difficult, if not impossible. Malicious actors will utilize these techniques to more

quickly and effectively target Western societies. The global competition for the next great leap in

political warfare will heat up as authoritarian regimes like Russia and China invest resources in

new technology. Policymakers will face increasingly complicated dangers to democracy as the

war for the future turns to the digital realm. By focusing on "Netflix Goes to Bollywood,"
Donald and Stefan discovered that the rise of Netflix came at the expense of existing

entertainment companies and cable networks. Netflix had just over two million customers in

India when it launched in 2016. Netflix identified India as the source of its "next 100 million"

users, with a population of 1.3 billion people, and increased its investment in the country faster

than any other market. In July 2019, Netflix launched its cheapest monthly mobile-only

membership option for Indian subscribers, in an effort to gain traction in the nation (Sull et al

2021).

OVERVIEW OF THE RESEARCH METHODOLOGY AND DESIGN OF DATA

COLLECTION

Quantitative research will be used in this paper. The "process of acquiring and interpreting

numerical data while taking into account a population sample" is characterized as quantitative

research (Bhandari, 2020). This will make it easier for us to spot market trends and make

informed decisions about the financial performance of the company. This study's data gathering

strategy will primarily quantitative as well as qualitative. the companies’ reports will be viewed

and the data analyzed to determine the financial performance of the companies. online surveys

will be used to get consumers views on the advances they might propose to be done in the

company’s services as well as provide data on the amount they are charged by Netflix.

METHODOLOGY FOR DATA COLLECTION PROPOSED

Data will be gathered through online "self-completion" surveys that will be sent to friends.

Multiple-choice questions will be included, as well as brief personal explanations of the relevant

variables. As a result, in order for the research to be accurate and valuable, the respondents'
honesty will be highly valued. Using free online survey platforms like Survey Monkey, the

questionnaires will be created and delivered by email and text messaging.

DESIGN OF SAMPLING

This research will employ the strategy of non-probability sampling, meaning the odds of a

certain person being included into the sample can’t be computed. Glen and his colleagues (Glen

et al., 2015). The researchers will encourage their friends to engage in the online surveys by

posting them on social media platforms, emails, and messaging applications. Due to time and

financial restrictions, with a sample size of one hundred persons, the study will use convenience

sampling convenient sampling refer to non-probability sampling where people close at hand are

sampled (Sumathy et al 2017). The reason for this sample size is that the researchers will be able

to collect responses from geographically distant links thanks to a multiculturally varied research

team scattered throughout US. Researchers will be able to better understand study issues and

provide responses in a more geographically specific context as a result of this.

PROPOSED DATA ANALYSIS METHODOLOGY

When it comes to determining the available investment opportunism for the companies,

multivariate analysis will be Convenience, necessity, additional value, perceived quality,

fairness, and security concerns are all factors that users consider. Multivariate analysis will be

employed because this study includes many variables and information requirements, as indicated

in the section below on Research objectives.

TECHNIQUES FOR DATA ANALYSIS

Simple statistics will be used to analyze the data collected. The questionnaires will be scrutinized

for completeness, accuracy, and consistency. The questionnaires will be examined for errors and

omissions, as well as for appropriate information, legibility, and relevant responses. As a result,
the data will be evaluated with the help of a statistical package for social sciences software

programmer. The purpose of qualitative data was to explain information, provide explanations,

and express perspectives not captured in the questionnaires. The data was then created and

displayed as graphs, tables, and charts displaying frequencies and percentages.

ETHICAL CONCERNS

When conducting research utilizing online surveys, there are a number of issues to consider.

Respondents may be hesitant to complete surveys due to concerns about privacy, while others

they may feel uncomfortable answering questions about their personal lives. To avoid this

problem, the respondents will first be given a complete explanation of the research's purpose. A

consent form will be included with the questionnaires, stating that their information will be used

for no other purpose than performing this study. As a result of this mutual agreement, the

researchers and respondents may create trust and collaborate, preventing future disagreements. If

respondents prefer to respond anonymously to the surveys, anonymity is ensured. If not, it may

aid the research because researchers will be able to verify the validity of the respondents'

responses.

LIMITATIONS

There may be limitations arising from this research, and they must be acknowledged and taken

into account. The findings would only reflect the preferences of a certain demographic in a

specific area due to the study's small sample size. the study will be curried in US but the Netflix

and Disney media companies serves the whole world. Furthermore, because consumers of

internet streaming services now have access to a much bigger population, differing demographic

preferences must be taken into account. however, the findings are analyzed and re-examined in

light of worldwide trends in customer preferences.

CONCLUSION

The financial stability of media companies has been growing since 2020 due to increased

subscribers that were increased by the pandemic regulations that forced people to spend more

time at their homes. This also attracted more innovations to media companies so as to deal with

the increasing demand. In overall the performance of the companies have greatly improved. This

research will then use both qualitative and quantitative data to determine the financial

performance of Disney and Netflix media companies. online surveys will also be utilized so as to

get the consumers ideas and their suggestions on possible changes to be done in those

companies. the collected data will then be analyzed using simple statistics.

REFERENCES