A new report from Goldman Sachs says Netflix is “a brutal business.”
The report, which analyzes Netflix’s revenue and profit, says that Netflix’s margins are among the worst in the industry, and that its margins are at risk if the streaming service continues to grow its business.
“Netflix is an industry leader in its own right.
But, at the same time, it is a business in decline,” Goldman said.
Netflix is the dominant player in video streaming, but it is also the dominant competitor in the content delivery and delivery network.
Goldman says that in order to stay relevant, Netflix must focus on the content that matters to consumers.
The report also calls for Netflix to take a “longer-term view” on content delivery, which could include making changes to its content delivery system or a “content licensing agreement.”
Goldman says Netflix’s competitors are “a lot more willing to spend money” than Netflix to deliver the best content.
“This is not the time for Netflix, as a provider, to focus on short-term wins,” the report said.
The company recently announced that it would stop using a video-on-demand model, which lets consumers watch videos while they are waiting for the next episode of a show.
Netflix has said that it is investing heavily in the future of its video service, but Goldman says it could be “an opportunity for Netflix’s own business model to be hurt.”