Author Topic: NFLX - Netflix  (Read 74919 times)

Gregmal

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Re: NFLX - Netflix
« Reply #220 on: September 20, 2019, 04:46:57 PM »
Yea I just dont see huge tolerance for price increases anymore as there are more legitimate alternatives now than ever before, whereas previously this was as simple as "I'm cutting cable and getting Netflix". Youtube I'd say is easily superior and has massive potential. Then the usual candidates like Hulu, plus now the new entrants like DIS and AAPL. So add in all of this and the assumption that content becomes harder/more expensive to acquire which will in turn lead to a lower quality catalogue...and yea, I can't see people continue to put up with prices hikes like they've been doing previously.

The numbers last quarter were atrocious. I was further surprised to see how much debt they've racked up as well as its been a while since I looked at it after owning it a long time ago. Things will get more expensive all around, while pricing IMO is capped, with customers becoming harder to acquire...and harder to keep. $200 is generous.


thepupil

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Re: NFLX - Netflix
« Reply #221 on: September 20, 2019, 07:19:08 PM »
Let me be clear, I will never own or short this.

I would on the other hand totally pay $50/month for Netflix.

RuleNumberOne

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Re: NFLX - Netflix
« Reply #222 on: September 20, 2019, 07:25:25 PM »
All that we need to understand from John Malone, is the self-reinforcing effect:

   buying scale => cheaper and broader content => more subscribers => more buying scale.

Netflix has 60m US subscribers. From what I remember, Comcast and DirecTV had around 20-24m subscribers and were the next two largest. Comcast at around < 24m subscribers had enough power to get a "MFP" clause - content owners had to give Comcast the lowest price.

Netflix has unmatched scale in buying power. Also unmatched knowledge of what their customers want to watch, therefore exactly how much to pay for what content.

Apple streaming and Disney+ are both 'upcoming'. It will take a while for people to realize that Apple is not getting anywhere and Netflix is not getting hurt. I am not invested in Netflix, just a John Malone fan. Netflix debt is very low compared to the lifetime value of their US consumers.

Gregmal

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Re: NFLX - Netflix
« Reply #223 on: September 20, 2019, 08:55:28 PM »
Well sure. Traditional media scale and content is not equal to what Netflix is. If Netlix stops adding new content the majority of their subs will leave. Especially if you keep raising prices. Comcast and DTV at least have live and consistently new and original/desirable, content. NFLX does not without spending more money. The fact that their competitors(ATT owns DTV and also has WB+HBO for instance, DIS has 21 Century Fox) can either cut them out completely or extort them is problematic.

I agree the AAPL product will be garbage. The point is, AAPL which has been slow AF to bring anything new to market now is launching streaming. So are others. This is just more competition for Netflix. If some of the staples in the traditional space have seen huge declines in their value ascribed by the customer(and Mr. Market) it is naive to think NFLX would be an exception. Frankly, given how large the gap is between pay TV packages like Comcast and Atice vs NFLX, there's a case to be made that this is where they should be at near peak earnings. Instead they trade and 100x or whatever and guess what...after years and years of fighting fate and sucking out profits from the traditional model(FWIW this is where autos are going as well IMO), now the big boys are coming for this space and undercutting them...but yea...they'll raise prices...without adding content/increasing spend, and their direct competitors will just continue to give them content....

Like I said, easy short here IMO, although perhaps I'm wrong. But what exactly are people even betting on here? That this is a $250B company? $500B? LOL WTF??? At those valuations you're basically betting on what? That they own 90% market share for all TV after finding a way to incorporate advertising revenue? With NO live content? No sports? This isn't a winner take all market and the comparisons to the dynamics of old cable are just as shoddy and the logic used by the big boys to put off dealing with NFLX for so long. It all comes down to content and if it were just about pricing then HULU would reign supreme.

Being long is basically assuming they are the most valuable media/content provider in the history of the world. That their current market share of 60M subs or IDK like >50% US market share of all people with a tv will increase to 60%? While every established player with ownership of better content and more resources just sits there and lets it happen?

Cardboard

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Re: NFLX - Netflix
« Reply #224 on: September 21, 2019, 02:44:39 AM »

UK

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Re: NFLX - Netflix
« Reply #225 on: September 22, 2019, 01:59:49 AM »
So content prices/bloodbath as Malone says, etc, but one more risk for NFLX, as a stand alone player:

"At its event Tuesday used mainly to showcase this year’s new devices, Apple also announced pricing and launch details for its TV+ offering. The service will launch on Nov. 1 for $4.99 a month, though a year of it will be included free for anyone buying a new iPhone, iPad, Apple TV, Mac or iPod Touch."

"Comcast Corp. is making its streaming device available free of charge to its internet-only customers, in an effort to capitalize on its expanding broadband customer base as the battle for streaming customers ramps up."

AMZN video for prime members etc.

So what implications for NFLX (or any other old media company) will be if more and more of video content will become a free product in order to subsidize other things for AMZN/AAPL/GOOG/ATT/etc?

« Last Edit: September 22, 2019, 06:49:26 AM by UK »

cameronfen

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Re: NFLX - Netflix
« Reply #226 on: September 22, 2019, 07:24:49 AM »
So content prices/bloodbath as Malone says, etc, but one more risk for NFLX, as a stand alone player:

"At its event Tuesday used mainly to showcase this year’s new devices, Apple also announced pricing and launch details for its TV+ offering. The service will launch on Nov. 1 for $4.99 a month, though a year of it will be included free for anyone buying a new iPhone, iPad, Apple TV, Mac or iPod Touch."

"Comcast Corp. is making its streaming device available free of charge to its internet-only customers, in an effort to capitalize on its expanding broadband customer base as the battle for streaming customers ramps up."

AMZN video for prime members etc.

So what implications for NFLX (or any other old media company) will be if more and more of video content will become a free product in order to subsidize other things for AMZN/AAPL/GOOG/ATT/etc?

So I think about this often especially in the context of Amazon as they enter more verticals Prime becomes a more potent bundle.  But I think the origional free streaming service package was Tmobile offering Netflix for eligible customers.  Obviously Tmobile doesn't own Netflix, but a lot of these deals are a response to Tmobiles marketing innovation as soon afterword Att offered like hulu, spotify offered hulu etc.  I think this deal capitalizes on the fact that a lot of streamers get more than 10-15 dollars a month of value from Netflix and would pay more which makes this partnership attractive.  I do not know whether the new competitive landscape will change things at least from a supply perspective. 

Foreign Tuffett

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Re: NFLX - Netflix
« Reply #227 on: September 22, 2019, 11:08:28 AM »
Let's step back from the fray a little bit and look at the big picture: Video content has gotten much less expensive for consumers over time. This trend seems to be accelerating.

20 years ago if you wanted to watch video content you could:
1) buy a movie ticket
2) rent a DVD
3) subscribe to a cable or satellite TV service
4) Buy a "bunny ears" antenna to try and pick up a handful of local stations

Think about the situation today in 2019. 1 - 4 still exist:
1) De Facto price cut via AMC A-List
2) De Facto price cut via Redbox and the various digital rental services
3) I don't know enough about cable and satellite TV to comment on how pricing has changed over time
4) Video quality and user friendliness has improved over time since (I think) in most places the signals are now digital

You also have all this other stuff:
5) YouTube and Twitch are free
6) Apple TV+ will be more-or-less free, given how many people buy 1+ Apple devices per year ("Through Family Sharing, up to six family members can share one Apple TV+ subscription")
7) Amazon Prime Video is more-or-less free, given how many people are going to subscribe to Amazon Prime whether Prime Video exists or not
8 Disney+, Hulu, and ESPN+ bundle will cost only $13 per month
9) Netflix is only $13 per month.
10) I'm not endorsing or recommending this since it's illegal, but millions of people use torrents and streaming sites to obtain content video content for free

If you add up #4 - 9 (let's ignore #10), that is a huge amount of content for (in effect) only $26 per month.

All this makes me think that I don't want to be involved anywhere in this ecosystem unless I am very confident that I'm betting on a long term winner with pricing power. Hard to be confident of that when things are changing so rapidly.

Jurgis

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Re: NFLX - Netflix
« Reply #228 on: September 22, 2019, 05:47:34 PM »
"Comcast Corp. is making its streaming device available free of charge to its internet-only customers, in an effort to capitalize on its expanding broadband customer base as the battle for streaming customers ramps up."

They are making device free. Not content.
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UK

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Re: NFLX - Netflix
« Reply #229 on: September 22, 2019, 08:35:58 PM »
https://www.wsj.com/articles/comcasts-peacock-becomes-latest-entrant-in-streaming-scramble-11568725206

In an effort to navigate these choppy waters, Peacock is expected to be available free to Comcast’s more than 21 million cable subscribers in the U.S. In addition, Comcast and NBCUniversal are also looking to strike deals with other American pay-TV providers that would allow them to offer Peacock to their subscribers free as well, a person familiar with the matter said.