Newcomer overshadows Disney as world’s top media company

● Netflix soared past the Walt Disney Company in market value this week, taking the title of most valuable media company from the film, TV and theme-park giant.

Shares of the video-streaming service rose as much as 2% to $351.48 (about R4 370) in New York, and the company’s market cap exceeds the value of Disney.

The advance underscores the high confidence investors have in the future of the world’s largest, paid, online video service.

Netflix’s value has surged from about $20-billion at the end of 2014 to surpass the world’s most powerful media giants, Comcast and Disney, this week.

Still, Netflix’s revenue remains well below that of the media titans. Comcast is the largest cable provider in the US and parent of NBCUniversal, which owns film studios, pay-TV networks and theme parks. Its sales totalled $84.5-billion last year.

Disney, with 2017 revenue of $55.1-billion, owns ABC and ESPN, two of the most valuable TV networks in the US, along with its namesake parks and resorts.

Netflix’s sales are forecast to grow 38% to $16.1-billion this year, based on analysts’ es- timates, as the company signs up more customers for its global video service. Subscribers totalled 125 million as of March 31.

The Los Gatos, California-based streaming company is spending billions on programming to attract new viewers, prompting concern among some analysts. Netflix will lay out about $8-billion for movies and shows in 2018, and has forecast $3-billion to $4-billion in negative free cash flow.

Investors have forgiven the cash burn so long as the company keeps growing. Netflix is the topperforming stock on the S&P 500 this year, and has led the index in three of the past six years. Disney is down about 5.5%, while Comcast has declined 21%.

Disney is responding to the threat posed by streaming ser- vices by moving more of its programming online. It introduced a web-based ESPN subscription service and has plans for an additional offering.

Comcast has begun selling the Netflix service as part of its cable packages. Bloomberg

The video-streaming company is spending billions on new programming