A controversial movie release and weaker-than-anticipated growth projections for the third quarter have barely stunted Netflix&#8217;s <a rel="noreferrer noopener" href="https://www.forbes.com/companies/netflix" target="_blank">NFLX</a> <a href="https://www.forbes.com/companies/netflix">0.0%</a> surge this year. Though they took a small hit amid the broader market&#8217;s September correction–after an all-time Netflix high in late August–shares of the Los Gatos, California-based firm are once again nearing peak levels. With the firm set to report earnings Tuesday after the market close, here are five numbers that show just how much the firm has dominated entertainment in the pandemic age.



<h3 class="has-text-align-center wp-block-heading">$235 Billion</h3>



That&#8217;s Netflix&#8217;s market capitalization the day before it&#8217;s set to release third-quarter earnings. It&#8217;s up nearly $100 billion in 2020 alone, making the 23-year-old streaming giant one of the 20 largest companies on the S&amp;P 500 by market cap–ahead of even media mainstays like Walt Disney <a rel="noreferrer noopener" href="https://www.forbes.com/companies/walt-disney" target="_blank">DIS</a> <a href="https://www.forbes.com/companies/walt-disney">-2%</a>, Comcast <a rel="noreferrer noopener" href="https://www.forbes.com/companies/comcast" target="_blank">CMCSA</a> <a href="https://www.forbes.com/companies/comcast">-2.7%</a> and AT&amp;T.



<h3 class="has-text-align-center wp-block-heading">60%</h3>



Netflix shares have soared more than 60% since the beginning of the year. To compare, the S&amp;P 500 is up just 6.5% in 2020. The firm&#8217;s billionaire cofounder and CEO, Reed Hastings, has gotten nearly $2 billion during the pandemic. The 60-year-old, who launched Netflix as a DVD subscription service in 1997 and owns roughly 1% of its shares, is now worth about $5.4 billion.



<h3 class="has-text-align-center wp-block-heading">195 Million</h3>



That&#8217;s the number of paid subscribers analysts expect Netflix will report on Tuesday, up 2.5 million quarter to quarter and in line with the firm&#8217;s latest guidance. Netflix said in July that it added 26 million subscribers during the first half of the year (10 million in the first quarter and nearly 16 million in the second) as homebound consumers facing government-mandated quarantine orders turned to the streaming giant–and away from movie theaters and live shows–for entertainment. That increase could even prove conservative, noted investment research firm CFRA on Monday, reiterating its buy rating on Netflix shares and adding that the firm could be bolstered by an increase in subscribers from international markets.



<h3 class="has-text-align-center wp-block-heading">$6.4 Billion</h3>



Analysts are expecting Netflix will pull nearly $6.4 billion in third-quarter revenues, up more than 20% from the same period last year. The company&#8217;s also expected to report earnings of about $2.13 per share, down from $1.47 per share last year on heightened costs amid the pandemic.&nbsp;



<h3 class="has-text-align-center wp-block-heading">$670</h3>



That&#8217;s the price target Bank of America <a rel="noreferrer noopener" href="https://www.forbes.com/companies/bank-of-america" target="_blank">BAC</a> <a href="https://www.forbes.com/companies/bank-of-america">-2.1%</a> issued on Friday for Netflix, up nearly 17% from a prior target of $575 and representing the highest Netflix price target on Wall Street. Despite near-term uncertainties around second-half subscriber growth–and a <a href="https://www.forbes.com/sites/carlieporterfield/2020/10/12/netflixs-sarandos-defends-cuties-calling-the-controversial-film-misunderstood/">highly criticized</a> movie release, Bank of America said it continues to see the acceleration in Netflix subscriber growth during the first half of the year as a &#8220;permanent benefit.&#8221; Netflix&#8217;s average price target from 39 analysts covering its stock is about $527–within 1% of current prices.



-By Jonathan Ponciano, Forbes Staff

Netflix

5 Big Numbers That Show Netflix’s Massive Growth Continues During The Coronavirus Pandemic

Entrepreneurship leads to a robust economy as it creates jobs and contributes to a country’s GDP. Entrepreneurs are brave people that influence a stable and growing economy. For this reason, it is essential to ensure that entrepreneurship is on the rise.
To promote growth, it is vital for government to provide assistance to established and emerging entrepreneurs.
To ensure that entrepreneurs are more likely to be successful, and subsequently influence job creation, it is important that they have access to the markets in which their goods and services will get the most benefit from. Currently, in South Africa, the government has a hand in the main challenges entrepreneurs face when trying to access markets – inflexible and unaccommodating taxes and bureaucracy, as well as a lack of entrepreneurship programs.
Business owners will only thrive in an environment that recognizes the need for entrepreneurs to be supported and nurtured. In South Africa there is a desperate need to teach entrepreneurship at an early stage of education.
With this promotion, and increased knowledge, youth will view entrepreneurship as a viable option for themselves rather than getting a conventional education so that they can be an employee. Furthermore, once someone has made the decision to pursue entrepreneurship, they need to be nurtured. This will allow them to use their knowledge and hone their skills to develop a viable and structured business venture.
Another challenge faced by South African entrepreneurs is getting finance to turn their ideas into a transacting business. It is also important to note that one can curb this by offering your service or product to other businesses, which will get some money flowing in. This revenue can be used to build a reserve and grow the business.
Cultural and social norms are also a contributing factor to the unwelcoming environment that entrepreneurs find themselves in. The ability of SMEs to penetrate existing and monopolized markets is hampered by internal market burdens as well as entry regulations.
Adding to this is the notion of established businesses that SMEs are not able to provide desirable goods and services due to the lack of experience they have. The government needs to promote the SMEs to established companies in accordance to the level of service that they are capable of providing. This will allow entrepreneurs to showcase their skills and products, which will change the perception that they are too amateurish to make an impact in business.
In our personal journey through entrepreneurship there are a few lessons that come to mind in relation to how others can thrive in South Africa today.
There is a lot to be gained from remaining focused on your goal.
Your success stems from relentlessly trying different avenues to expose your business and making the necessary sacrifices.

Tech scene in Cape Town, South Africa

The Relentless  Journey Of Entrepreneurship

South Africa’s renewal of the African Growth and Opportunity Act (AGOA) with the United States (US) a few months ago seemed to be about local poultry, when in fact negotiations were about a wider range of exports from 39 predominantly sub-Saharan African countries.
All had to meet the criteria of good governance, sound democratic values and protection of property rights. Countries such as Zimbabwe and Swaziland did not make the cut. It also did not go unnoticed that sub-Saharan Africa accounts for around $1.6 trillion of Africa’s $2.4 trillion GDP. AGOA therefore gives the US economic reach into countries where it would ordinarily have no influence.
AGOA is not a gift. As South Africa discovered, its economic strength on the continent does not guarantee its AGOA membership, and the accompanying eligibility to trade at preferential rates with the US. If South Africa did not loosen its stance on the anti-dumping tariffs imposed on chicken imports from the US, it would feel the costs in more lucrative areas, such as motor vehicles and parts, and wine and citrus exports. In the end, South Africa agreed to take 65,000 tons of bone-in chicken imports per annum, free of anti-dumping duties, from the US. Concessions could, however, have been as high as 300,000 tons, threatening an industry in which almost a billion chickens are slaughtered each year for local consumption.
The arrival of 16,000 tons of US chicken, a few weeks ahead of the deadline in mid-March this year, allowed South Africa to retain its preferential access to the world’s biggest market, and benefit from the latest version of AGOA, which was extended until 2025.
The arm wrestle between the US and South Africa may have been prompted by pressures the Americans were facing elsewhere. The dollar was strong at the time and the US needed to find export markets for its chicken. There was also the issue of a trade war looming with its neighbors, Mexico and Canada, over meat-labeling legislation, where the World Trade Organization ruled in favor of these countries being allowed to retaliate with $1 billion in punitive tariffs.
Another plausible reason was Russia imposing its own sanctions on the US in retaliation for economic sanctions it suffered while attempting to Balkanize the Ukraine. With threats to its industry coming in fast and furiously, pressuring South Africa to make the concessions must have seemed an easy option.
With the focus on what concessions the South African poultry industry had to make, it was easy to lose sight of the shortcomings in South Africa’s domestic trade policy. The concessions shed light on the lackluster performance of the manufacturing sector, caused by the political economy tilting left, protectionist trade policy, restrictive regulation, and labor disruption.
The pending Private Security Bill on the local security industry, which could see 51% of US-based companies, like Chubb, G4S and ADT, sold to South African participants, was also a worry, as were plans to limit foreign ownership of property. While the knee-jerk response may have been to assume that greater local ownership translated to black economic empowerment, a more significant interpretation is that no private foreign entity has an equity interest in South Africa’s state defense and protection services, and by extension, neither should they have controlling equity interest in private security establishments.
Land restitution may also fall short of AGOA legislation. The still-to-be promulgated Regulation of Land Holdings Bill will not affect foreign ownership of residential property, but will prohibit ownership of agricultural land, which could instead be leased for between 30 and 50 years. A ceiling on land ownership would be set at 12,000 hectares, regardless of nationality.
The potential overhaul of intellectual property laws, which could impact the pharmaceutical industry, is also concerning. While it makes socio-economic sense to roll out cheap generic drugs to as many South Africans as possible, foreign-owned multi-nationals may see this as an infringement of patents on their own more expensive medication.
Although the controversy surrounding the chicken industry seems to have settled, South Africa is still vulnerable to the vagaries in US trade policy. Should the US feel aggrieved by any of its preferential offerings, they may be withdrawn much quicker than what was allowed under the older version of the agreement. South African policymakers should be more cautious when making decisions, especially those that affect US interests.

Playing Chicken  With The US

Private equity firms are becoming increasingly important in investing in thriving businesses and contributing to the development of African consumer markets. Numerous industry analysts are predicting that 2016 will see significant growth in this industry throughout sub-Saharan Africa as investors seek alternative asset classes to generate robust returns.
The private equity industry in South Africa has seen steady growth over the past decade and has attracted the cream of the crop of the banking sector, including investment bankers, merger and acquisition executives, management consultants and asset managers to name a few. Over the years, the number of these individuals who’ve elected to join private equity firms has increased. The audacious among them have opted to set up their own private equity funds to have autonomy over their investment strategies. The growing demand to recruit these executives, coupled with the increase in new private equity start-ups, indicates growth prospects for the industry at large. It also helps that the industry offers attractive remuneration packages and prestige that will elevate their career profile.
The Southern African Venture Capital and Private Equity Association (SAVCA) contends that although “&#8230;private equity is still under-represented in sub-Saharan Africa, the asset class presents an opportunity for investors to invest in a region that is experiencing strong economic growth and which is generating robust returns.” Some surveys have gone as far as predicting that around 80% of investors expect African private equity to outperform the African listed equity market in the next decade. This is a bold prediction, but one which cannot be dismissed.
Recent stats of the South African private equity industry are compelling. SAVCA reported in their latest RisCura-SAVCA South African Private Equity Performance Report that, “by mid-year 2015, the South African private equity industry delivered a ten-year internal rate of return (IRR) of 21.7%, up from 20.5% in March 2015. This performance compares with the 17.1% return from the FTSE/JSE All Share Total Return Index (ALSI) over the equivalent ten-year period.”
The reality of the matter is that the fast-growing African region presents countless opportunities for businesses and investors alike. When economies experience tangible growth they enable other industries and sectors to expand via the multiplier effect. For instance, Africa presently requires extensive investments in infrastructural development, energy, entrepreneurial support, skills development, research and development, and numerous others to drive economic growth.
Take a look at the need to improve transport infrastructure throughout Africa for instance. The construction of road networks, together with the upgrading of ports and airport facilities, will be done by engineering and construction firms. Some of these firms will be based in Africa and will require private equity partners that can provide the necessary financial and human capital support. Through this support, firms will have the backing and potential to grow exponentially.
The South African private equity market amounts to R170 billion ($10 billion) in assets under management, and although this may not typically appear large when contrasted with other asset classes, it is significant in the context of a niche asset class. SAVCA believes that the industry is maturing and this is demonstrated by the emergence of specialist private equity funds which are dedicated to focused industries or sectors depending on the scale of the fund. In addition, South African-managed funds have broadened their focus by exploring investments outside the country, indicating that the South African private equity market has developed over the years.
In the past, the private equity industry was largely concentrated in the developed markets in the United States and Europe. However, a number of emerging markets, such as South Africa, have seen significant growth over the past decade and, if future projections are anything to go by, the trend seems likely to continue.
Africa is teeming with opportunities for businesses to expand and private equity firms are the formidable partners that can bring this to fruition. Watch the space.

Watch this space

Since 1985, Africa’s growth has dipped below zero only twice – in 1991 and 1992. Over the past 10 to 15 years, the continent’s growth has been impressive, fueled by fast-paced urbanization, increasing political stability, connectivity, a youthful population and an expanding middle class.
Another contribution to its success is the emerging trend towards economic diversification. While in the past, Africa’s growth has been largely resource-dependent, the 2008 global financial crisis exposed the continent’s vulnerability to external economic shocks. Those economies largely dependent on the export of commodities were hardest hit.
The movement towards economic diversification has the potential to increase Africa’s resilience. It will also contribute to the continent’s development and ability to achieve sustainable, long-term economic growth.
Small, medium and micro enterprises (SMMEs) have played a critical role in the stability of economies on the continent. Overall, SMMEs account for 20% of Africa’s gross domestic product (GDP) and 50% of the continent’s jobs. In South Africa’s case, an estimated 2.8 million SMMEs contribute between 52% and 57% of GDP. They also provide about 61% of employment, according to official government figures.
However, the development of these budding areas of economic prosperity requires the combined efforts of African governments and the private sector.
“Finance is the number-one biggest constraint for businesses, particularly in Africa,” says Delphine Govender, co-founder of Perpetua Investment Managers. Finance is thus a very nece-ssary discussion to have. In Nigeria, for instance, the formal financial sector meets only 1% of business needs. In China and India, these percentages are above 20% and 30%, respectively.
There is no denying that Africa’s needs are great. But in addition to the construction of physical infrastructure, there is social infrastructure and business growth. Finding sound projects can be a challenge, Govender says. Investors require returns that commensurate with risk, and often, the challenge is not necessarily in financing the project, but in repaying that finance.
Brian Molefe, the chief executive officer (CEO) of South African rail and infrastructure company Transnet, believes “transformational leadership” is key to growth. He says leadership is about making bold and audacious decisions. And then acting on those decisions: “We’re good at talking, but we need to start doing.”
Furthermore, Africa’s leadership needs to decentralize and become more accessible. This is where social media platforms can play a role. In Rwanda, for example, the president and many politicians are active on Twitter, keeping the government accountable to ordinary citizens.
Admassu Tadesse, the CEO of the Burundi-headquartered Eastern and Southern African Trade and Development Bank, commonly known as the PTA Bank, says that leaders on the continent are under pressure to live up to expectations.
“We’ve done well but there is huge pent-up demand that needs to be dealt with, such as infrastructure. This is the challenge we face.”
Tadesse points out that Africa’s strong growth has also not translated into jobs, which is of major concern, given the millions of young people who enter the job market every year.
“Average growth rates of six percent are not sufficient. Rather, we should be targeting nine percent,” he says. Tadesse has also highlighted that African investment as a percentage of GDP at 22% still lags behind other regions, including Latin America at 32% and Asia at more than 40%. The solution, he argues, is to ensure that Africa’s growth becomes inclusive.
One of the key challenges African companies face is how best to take advantage of the continent’s status as the new economic frontier.
Opportunities abound in developing industries such information and communications technology (ICT) and energy. This is evident from the growing investment in alternative sources of power, such as nuclear, gas and renewable energy (hydro, wind and solar). Immense quantities of natural gas have been discovered in South Africa’s Karoo region. It has led to fierce public debate, weighing up the possible impact on the environment against potential job creation.
Organizations such as the International Finance Corporation, the World Bank’s private sector arm, are investing in the sector, particularly in energy efficiency and in renewable energy.
And the critical role that ICT is playing in transforming Africa by connecting businesses, citizens and governments cannot be undermined.
However, it is only through emphasizing intra-African trade that the continent’s growth and prosperity can be truly inclusive and sustainable.
The continent’s resources will not last forever, especially with a population that is expected to double in the next 30 years. This warrants more focus on diversifying economies, ensuring financial inclusion and emphasizing sustainable growth.
For Pravin Gordhan, South Africa’s finance minister, the solution lies in developing the kind of business models that will buffer the economy against further shocks. “Africa has come a long way in terms of reducing risk premiums… (But) we do have a perception deficit,” he points out.
The continent’s time has come, but success depends on the choices that African leaders make and the institutions they build.
The authors are media consultants. This article is based on discussions held at the Association of Black Securities and Investment Professionals conference in September.

Tag: Growth

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5 Big Numbers That Show Netflix’s Massive Growth Continues During The Coronavirus Pandemic

The Relentless Journey Of Entrepreneurship

Playing Chicken With The US

Watch this space

Africa Rising How Africans can Dynamize the Continent