The Netflix of the future will also diversify its operations to include a cheaper service that will be funded by embedded advertising as a means to boost revenue.

It will also address some of the much-loved customer perks such as allowing password sharing, which has enabled a number of viewers to piggyback a single subscription in the hope that addicted viewers will buy their own service.

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Fending off the plethora of new entrants will remain a challenge, but Netflix believes that investing in product is the only way to win that war - and will retain its US$17 billion ($25 billion) expenditure on content.

The question for investors is whether Netflix shares have sufficiently bombed, now trading at an 18 times multiple of earnings, that they represent value. (In 2020, it was trading at a price earnings ratio of 85 times.)

Now that the market has digested Netflix’s latest quarterly earnings, the share price trajectory will depend more on market sentiment.

The school of thought that says the worst is over for equity markets and that the stench around growth stocks is starting to lift.

The improvement in the performance of the Nasdaq is generally seen as the bellwether of confidence in the market, and sign that investors are prepared to wear more risk.

But these green shoots are still in their infancy. Since the start of July, the tech-heavy Nasdaq has risen 6.2 per cent while the Dow has gained 3.4 per cent. (The Nasdaq rose 3 per cent on Tuesday alone.)

That said, these tentative signs remain fragile and sensitive to the potential for more bad news either on the inflation front or on the prospect of a recession in the US.

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The market will also react negatively to lower-than-expected quarterly results delivered in the current profit season.

To date, about 60 per cent of those large companies that have already reported have exceeded profit expectations.

Perversely, it is a stream of profit downgrades leading up to reporting season that has allowed profits and revenue to come in ahead of expectations.

It allows bad profits to be viewed enthusiastically by the market. Yep - stranger things.