Here is how Netflix can gain back its glory
On 20-Apr-2022 Netflix stock price took a nose dive — it dropped by 30%. In fact since the beginning of the year Netflix stock price was dropping due to subscriber base keep declining. New streaming competitors are taking away from Netflix’s pie and things are looking dark for the streaming giant.
Russ Mould, investment director at AJ Bell, said: “The cost of creating shows and films continues to go up and Netflix is spending big on marketing to keep its brand in front of consumers, so it needs to think beyond subscription income in terms of money coming through the door.”
Competition from giants such as Apple TV, Amazon Prime, and Disney+ are all eating up into Netflix’s subscriber base. Netflix has just entered a very dark tunnel and it will need an innovative ideato get back into the light.
Tokenization to the Rescue
What is a Token.
A token is a representation of value. When you go to London, you use the underground train, you have to use the Oyster card. the Oyster card is a token, it has value because of the cash value in it and the fact that it gives you service in return. You cannot use the train or the bus system without the Oyster card. The same when you are in Dubai. If you want to use the Dubai Metro you must have the Nol card. It has value because it delivers a service that takes you from place to place in the city through the Metro Station. When you do to World Disney you have to use the Disney dollar — Disney dollar is also a token of value.
Tokens can make you Millions — here is how
Binance launched their own token called Binance Coin — BNB. There is currently approximately 168 million BNB coins in circulation today. Each BNB is priced at around $419 . Giving its circulation value at around $70 billion. No wonder CZ, the founder of Binance is one of the top 20 richest men in the world.
Kucoin, a Cryptocurrency exchange launched its own coin — KCS. Currently there are more than 30,000 cryptocurrency tokens in circulation and some of them their value is in the billions. For example, Cardano ADA, NEAR, Terra Luna and the list goes on.
The technology that makes tokenization possible is blockchain. Its the same technology that make NFT, Bitcoin and DeFi protocols possible. The engine that powers all the cryptocurrencies in the market today is blockchain and its growing like wildfire in the world if finance today.
There are different types of tokens
- Utility token: is a crypto token that serves a use-case within an ecosystem. These tokens allow the users to perform some action within its network.
- Security tokens: are tokens that represent investment or finance security products. They are digital forms of traditional securities that live on a blockchain. These tokens could represent ownership of a fraction of any valuable asset, like a car, real estate, or corporate stock
Lets focus on utility token; for example, Uber can release its own cryptocurrency token called UTX, and inform its users that now they can only accept UTX as a form of payment when using Uber rides. Hence users will have to go to a cryptocurrency exchange and exchange their USD and buy UBX tokens so that they can use it on the Uber rides. Naturally the demand for UBX will grow exponentially.
NFX — Netflix cryptocurrency token:
Netflix can release its own cryptocurrency utility token priced at $1. However the token must have a specific use-case. An example of a use-case can be that Netflix would say owners of NFX token can stake the token and earn annual percentage interest per year APY as profits into their wallets. Netflix can then use that staked token to help fund their shows. Crypto.com — a popular crypto currency exchange is offering “staking” with their CRO token in a similar fashion. Another option for a use-case would be that Netflix can say that owners of NFX tokens would be entitled to profit shares of a certain show. For example, if a show generated $10,000 profit in one season, 20% or 2000 would be distributed to owners of the NFX token each based on their token share holdings. This is similar to how real estate assets are being tokenized such as the tokens offered by www.realt.co where you can own a 20% ownership share in a house in Michigan for the price of $100. When the house gets sold you earn the ownership stake in that house based on your token share stake. If the house is rented, you receive the monthly rental based on your token share stake.
Tokenization can offer many advantages based on the above examples. The aim is to create enough value in the token that would drive up the demand for it. With Netlix’s strong brand name and enormous global subscriber base, they can easily get the demand for the token, the aim is to have the use-case clearly defined. In order to know more about tokenization use-cases I created this course, it includes a free preview of the course
