Netflix did relatively well during the Great Recession. It was still a smaller, fast-growing company, but its stock and subscriber base both held up unusually well compared with the broader market.

What happened

  • One source says Netflix returned about 30% over the prior 12 months in early 2009, while the S&P 500 was down 43% over the same period.
  • Another summary says Netflix was up 77% during the Great Recession as investors got excited about its early streaming growth.
  • A different account notes that Netflix’s stock did fall sharply during the crisis, but it later recovered faster than the S&P 500 and had regained its pre-crisis peak by March 2009.

Why it held up

  • Netflix offered an affordable subscription service , which fit a recession when households look for lower-cost entertainment.
  • Its model was more scalable than physical video rental stores, which helped it look stronger than rivals like Blockbuster.
  • The company was also in an early growth phase, so investors were buying into a long-term story rather than a mature business.

Simple takeaway

Netflix was not perfectly immune to the recession, but it was one of the businesses that came through it unusually well. For consumers, it was a cheaper entertainment option; for investors, it became a standout growth stock in a rough market.