Netflix

[weijian]

For those who have 55mins to spare...a pretty good summary on Netflix and its future.

With capital markets starting to discipline companies who are used to losses (eg. Disney and Amazon in the streaming space), the future FCF generation capability of streaming might be interesting.

Ben Weiss - Netflix: The Original

Ben Weiss is the Chief Investment Officer of 8th & Jackson. We cover Netflix's tech advantages, the state of the streaming market, and where future cash flows are likely to come from.

https://www.joincolossus.com/episodes/99...e-original

[weijian]

Sounds like a good plan. Margins are expanded in 2 ways - First, one needs to pay another ~35-40% to add 1 more member. Secondly, to add member, one needs to upgrade away from their basic plans.

An Update on Sharing

Members on our Standard or Premium plan in many countries (including Canada, New Zealand, Portugal and Spain) can add an extra member sub account for up to two people they don’t live with — each with a profile, personalized recommendations, login and password — for an extra CAD$7.99 a month per person in Canada, NZD$7.99 in New Zealand, Euro 3.99 in Portugal, and Euro 5.99 in Spain

https://about.netflix.com/en/news/an-update-on-sharing

[weijian]

When Netflix first started out as a DVD seller and then renting them out, they stocked up enormous amount of inventory. To them, the cost of DVDs wasn't expensive inventory, it was inexpensive advertising - Cost of a DVD disc = 20 bucks. A reputation for having everything = priceless (Just like a Mastercard commercial)

So does it suggest that keeping a blind eye to password sharing was cheap CAC? (customer acquisition cost). Of course, Netflix is discretionary spending - one could easily unsubscribe and then subscribe back in future, still having the whole library at disposal. So in many ways, Netflix is getting more and more correlated to the general economy.

Netflix saw a spike in subscribers in the days following its password-sharing crackdown in the US.

Well, this might not come as a surprise, but Netflix’s password-sharing crackdown already appears to be working in the US. According to the data analytics company Antenna (via The Wall Street Journal), Netflix saw a huge spike in subscribers in the four days after it notified users about its paid sharing policies on May 23rd.

https://www.theverge.com/2023/6/9/237551...-crackdown

[weijian]

Netflix's traditional rivals were already behind on the international markets. Now they will be further behind, it seems.

Netflix uses Squid Game playbook for untapped South-east Asia

Netflix is ramping up local production in South-east Asia, aiming to boost its subscriber base in the populous region even as its US rivals are pulling back.

The Asia-Pacific region is currently the smallest market for Netflix, accounting for about 11 per cent of revenue in 2023. But a large, young demographic also presents a significant opportunity for growth.

Following the success of original shows from South Korea, such as Squid Game, and Japan’s pirate series One Piece, Netflix is adopting the playbook in Thailand, Indonesia and the Philippines.

https://www.straitstimes.com/business/ne...-east-asia

[weijian]

These guys are leaving their competition behind. To be honest, I have been surprised by their execution level to leave their competitors behind, in this "winner takes most" market. On one part, it was their superior execution and rightful focus (we are not a streaming or film company. We are in the attention business and anything that competes your attention is our competitor), but could we also suspect that their traditional rivals had little chance considering their baggage and missteps?

Netflix beats Q3 earnings targets with five million new customers

Netflix has been trying to shift investor attention away from subscriber sign-ups to other metrics, including revenue growth and profit margins. The company said its operating margin hit 30 per cent in the quarter, compared with 22 per cent a year earlier.

Nearly two years into its advertising business, Netflix is working to increase revenue from ad-supported plans but has said it does not expect advertising to become a primary growth driver until 2026.

Part of the plan centres around live events including sports, a big draw for advertisers. In November, Netflix will stream a fight between YouTube star Jake Paul and Mike Tyson, followed by its first NFL games in December.

https://www.businesstimes.com.sg/compani...-customers