Netflix

I started a new thread for this company.

Netflix profit doubles on U.S., foreign subscriber growth

LOS ANGELES - Netflix Inc said on Monday its quarterly profit more than doubled, boosted by strong growth in U.S. and international subscribers as a price increase for its most popular U.S. video streaming plan did not deter new users.

Netflix added 570,000 U.S. customers in the second fiscal quarter ended June 30, passing 50 million worldwide subscribers for the first time. It added 1.12 million customers in international markets. http://bit.ly/UnqT1D
...
http://www.todayonline.com/business/netf...re-doubles

It has been a while now, since the lines between content and streaming service providers have been blurred. It seems like a case of "if you get into my turf, i will have to respond and get into yours, lest the risk of losing future bargaining power is too huge".

Feels like all part of the "business cycle" to be honest - When things are good, one thinks of expanding horizontally across their competitive advantages. When times are bad, it is time to sell all "unperforming non core businesses" to competitors and cut costs.

Disney will pull its movies from Netflix and start its own streaming services

Disney announced during its latest earnings report it intends to pull all its movies from Netflix
It also will launch an ESPN video streaming service in early 2018, including MLB, NHL and MLS content.
There's also plans to launch a branded Disney direct to consumer streaming service in 2019

https://www.cnbc.com/2017/08/08/disney-w...vices.html

Netflix Shatters Estimates With a Surge in Year-End Subscriptions
By Lucas Shaw
January 23, 2018, 5:10 AM GMT+8 Updated on January 23, 2018, 9:07 AM GMT+8

Quote:Netflix Inc. surged in late trading after a blow-out quarter, vaulting past $100 billion in market value for the first time to put the video service on a lofty perch with the likes of Goldman Sachs Group Inc. and Qualcomm Inc.

The world’s largest online TV network late Monday reported its strongest year of subscriber growth to date. Netflix added 24 million customers in 2017, bringing its global total to 117.6 million. For the final three months of the year, the Los Gatos, California-based company crushed Wall Street estimates and suggested it will continue to do so in 2018.

(not vested; monitoring)

Good read to understand more about Netflix for all VBs over this long Vesak weekend (I myself could do with understanding the FAANGs more)

https://redef.com/original/netflix-misun...n-it-seems

Netflix shares plunge as global growth falls short, U.S. customers shrink

Lisa Richwine, Vibhuti Sharma
JULY 18, 2019 / 3:10 AM

(Reuters) - Netflix Inc (NFLX.O) said on Wednesday it lost U.S. streaming customers for the first time in eight years and missed targets for new subscribers overseas, an announcement that jarred investors ahead of looming competition.

Netflix shares sank nearly 12% in after-hours trading after the company posted quarterly results that showed it shed 130,000 U.S. customers from April to June.

The world’s dominant subscription video service said its slate of new shows during the quarter was not as appealing as expected and price increases in some markets dented growth.

Netflix reported that it added 2.83 million paid streaming subscribers outside the United States, below analyst expectations of 4.8 million, according to IBES data from Refinitiv. Analysts had forecast a U.S. gain of 352,000.

“Our missed forecast was across all regions, but slightly more so in regions with price increases,” the company said in a letter to shareholders.

“We think Q2’s content slate drove less growth in paid adds than we anticipated,” it said.

Chief Executive Reed Hastings said on a video call with analysts the company’s internal projection still showed it expected to end 2019 with more new subscribers than it added in 2018. It currently boasts 151.6 million streaming customers worldwide.

“I think our position is excellent,” he said.

Netflix has staked its future on global expansion and creating original TV shows, movies and documentaries to attract new customers and keep the existing ones paying monthly subscription fees.

“Even though we expected slowing user growth in the U.S., a negative paid net additions number is shocking,” said Clement Thibault, analyst at financial markets platform Investing.com.

“The problem is that with intensifying competition, there is no guarantee Netflix has the pricing power needed to raise prices without massively bleeding users.”

Netflix raised prices in Britain, Switzerland, Greece and Western Europe during the second quarter.

A Reuters/IPSOS poll in March found 81% of U.S. Netflix subscribers polled said they would cut the service if the monthly price rose by $5.

The last time Netflix lost U.S. subscribers was in 2011 following an uproar over a price hike and a plan to split its DVD-by-mail and streaming services.

Looking ahead, Netflix projected it would add 7 million paid streaming customers in the third quarter with help from a new season of supernatural thriller “Stranger Things,” released on July 4. That is more bullish than the 6.6 million forecast from analysts polled by Refinitiv.

But looming in November is the launch of Disney+, seen as a formidable entrant into the streaming market, and original programming from Apple Inc (AAPL.O). AT&T Inc (T.N) and Comcast Corp (CMCSA.O) have said they plan their own offerings next year.

Netflix also faces the future loss of its two most-streamed shows. “The Office” will come off Netflix in January 2021 and head to Comcast’s streaming platform, while “Friends” will end its run on Netflix at the beginning of 2020. It will move exclusively to the upcoming AT&T service HBO Max.

More details in https://www.reuters.com/article/us-netfl...SKCN1UC2JE

Netflix appears to have a similar strategy with mm2. Or is it the other way?

Both are focused on producing content, and distributing it to the market through their own channels.

But where Netflix does it 'high-tech' (in the form of streaming), mm2 does it 'old school' (in the form of cinemas). Their markets and ability to scale are also quite different, as I have described in the mm2 thread.

The ultimate objective for Netflix is probably to develop a strong intellectual product, like the characters of Marvel or Disney. To this end, I'm not if it is succeeding. It creates its own distribution channel only to prevent being stifled by competitors and established down-stream players.

I guess mm2 has similar objective, given its continuous investment into production. But it looks like their strategy of producing films with lesser known directors and actors/actresses is not getting them anywhere close to developing a regional hit.

In other news, critically acclaimed film actress -- Yeo Yann Yann -- will be cast in a 6-episode HBO series filmed in Singapore, to be released later this year.

https://www.straitstimes.com/lifestyle/e...-yann-yann

(19-07-2019, 08:01 AM)karlmarx Wrote: Netflix appears to have a similar strategy with mm2. Or is it the other way?

Both are focused on producing content, and distributing it to the market through their own channels.

But where Netflix does it 'high-tech' (in the form of streaming), mm2 does it 'old school' (in the form of cinemas). Their markets and ability to scale are also quite different, as I have described in the mm2 thread.

The ultimate objective for Netflix is probably to develop a strong intellectual product, like the characters of Marvel or Disney. To this end, I'm not if it is succeeding. It creates its own distribution channel only to prevent being stifled by competitors and established down-stream players.

I guess mm2 has similar objective, given its continuous investment into production. But it looks like their strategy of producing films with lesser known directors and actors/actresses is not getting them anywhere close to developing a regional hit.

In other news, critically acclaimed film actress -- Yeo Yann Yann -- will be cast in a 6-episode HBO series filmed in Singapore, to be released later this year.

https://www.straitstimes.com/lifestyle/e...-yann-yann

You mentioned that “It creates its own distribution channel only to prevent being stifled by competitors and established down-stream players.”

I have the impression it’s the other way round. The business started as a DVD rental/distribution business and streaming was an extension of that. On realizing that in the end the content is what matters, they started developing original content intensely. The company started financing these by borrowing etc.

I do agree that I am not sure whether their original content is working out. I do subscribe to Netflix and watch mostly non Netflix shows. Their original movies fails to interest me at all.

Any other Netflix subscribers here? Do you all think it’s really not a zero sum game of subscribers? If they company’s growth plateaus then is it right to command PE of 100?

I am not a Netflix fan but my impression/memory is similar to that of Squirrel's. So it is probably the other way around - they started as distributors before realizing that content is key, and moved towards content creation. At the same time, the content creators (like Disney or Warner Media who owns HBO) took the lessons of how Amazon (a distributor) destroyed many brands by owning the customer relationship, and move towards distribution themselves.

Video Streaming: 2007
First original content: 2013
https://variety.com/2018/digital/news/ne...202910483/

While we don't know whether the creator-turned-distributor or distributor-turned-creator is going to prevail. But we do know that payTV stands in their way and we probably know how it is going to end for payTV - going the slow "death by a thousand cuts" on their margins like postal and print news ads.

Netflix goes negative for the year, giving up a 46% gain
* Shares of Netflix erased all of its 46% gain for the year at its peak and officially entered negative territory on Monday.
* The newcomers in the streaming space, including Apple and Disney, are already winning in terms of pricing.
* Some Wall Street analysts have started losing faith in their darling stock.

Yun Li
PUBLISHED MON, SEP 23 2019  2:15 PM EDTUPDATED MON, SEP 23 2019  4:08 PM EDT

What a difference the past two months made for Netflix.

It was just early July when the streaming video giant’s stock was flirting with new record highs. Now after an unexpected loss of subscribers and increased competition in the streaming war, shares of Netflix erased all of its 46% gain for the year at its peak and officially entered negative territory on Monday.



Netflix has been haunted by nonstop bad news in the past few months. First, its most popular show “The Office” was stripped from its platform by NBC. Then, Netflix was hit by a rare loss in U.S. subscribers and a large miss on international subscriber adds in the second quarter, which sent the stock plunging and suffering its longest losing streak in five years.

A slew of announcements from media companies launching their own streaming services — Apple, Disney, AT&T’s WarnerMedia, NBC — came as a last straw for the struggling stock.

Some Wall Street analysts started losing faith in their darling stock. Barclays analyst Kannan Venkateshwar said Monday Netflix is “very expensive” under a new valuation framework for growth companies as Netflix needs millions more subscribers than it can get.

Most of Netflix’s gains for 2019 came from a big pop in January when the company flexed its pricing power. It raised prices by 13% to 18% then and the stock soared. In a more crowded streaming space today, hiking prices may not be so welcomed by investors again.

Nomura Instinet analyst Mark Kelly told CNBC that increased competition could “take away engagement,” “make content more expensive,” “or diminish the price power Netflix has exhibited for several years.”

The newcomers are already winning in terms of pricing. Apple announced its original TV service will cost $4.99 a month, while Disney will offer high definition streaming as part of its standard $6.99 plan for its new Disney+ channel. Netflix’s basic plan in the U.S. is at $8.99 per month.

More details in https://www.cnbc.com/2019/09/23/netflix-...-gain.html

Netflix could lose four million U.S. subscribers in 2020: brokerage

Reporting by Aakash Jagadeesh Babu in Bengaluru; Editing by Anil D'Silva
DECEMBER 10, 2019 / 7:20 PM

(Reuters) - Needham and Co was the fourth Wall Street brokerage in two months to cut its rating for Netflix Inc (NFLX.O) on Tuesday, arguing competition from new streaming services could lead to the loss of 4 million premium U.S. subscribers next year.

Needham analyst Laura Martin, who downgraded the California-based tech giant to “underperform”, believes Netflix will have to add a lower priced service to compete with competitors including Apple Inc’s (AAPL.O) Apple TV+ service and Walt Disney Co’s (DIS.N) Disney+.

The cut came a day after Netflix dominated nominations for January’s Golden Globe awards, landing 17 in TV categories and 17 more for movies, including leading contenders “Marriage Story” and “The Irishman”.

Netflix’s video streaming push has seen subscriber numbers dwarf those of rival services at the cost of huge investment in both regional and international content on its platform.

The streaming service had 60.62 million paid subscribers in the United States as of its latest quarter ended Sept. 30, accounting for over a third of its global subscriber base.

The approach comes at the cost of a rising debt pile, which stood at $12.43 billion as of Sept. 30, sparking concerns among investors.

Martin argued that the video streaming pioneer’s staunch refusal to allow advertising on its platform force it to stick with premium price points which will result in subscriber losses in its most profitable market.

“Netflix’s premium price tier of $9 to 16 per month is unsustainable,” Martin said, adding that the loss of popular TV shows such as “Friends” and ‘The Office’ to its competitors could hit the company’s value over time.

More details in https://www.reuters.com/article/us-netfl...SKBN1YE1FJ