# Netflix Inc. (NFLX)



## Addy (Mar 12, 2010)

Does anyone here have NFLX in their portfolio? I don't and won't be buying anytime soon but there's people who must be selling off like crazy with the price it's at now. I imagine there will be something else come along and Netflix won't be as popular as it is currently.


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## Addy (Mar 12, 2010)

Jan 25, 2013 (Analyst Reflections via COMTEX News Network) -- Janney Montgomery upgraded NetFlix (NASDAQ:NFLX) from Neutral to Buy a week ago. The shares closed at $146.86, or 50.7% over the $97.48 price of one week ago.

Insane.


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## lonewolf (Jun 12, 2012)

A few months ago yorba radio interviewed a guy that working on the future method for tv. 

There would be 2 options a cheaper package that had advertising & a more expensive one for no advertising.


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## PMREdmonton (Apr 6, 2009)

The company has no real moat. There are powerful competitors lining up against them (Apple, Google, Amazon). They have no chance of winning this and at this valuation little chance of being bought out at a premium.

They must have a PE around 100 again.

If you are into shorting, this one may be good but who knows how far it can run up again.

I wouldn't touch this one. It's a worse investment than Facebook.


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## doctrine (Sep 30, 2011)

I somewhat disagree. There is no true competition yet; a product that is as cheap, has as much content and is as accessible/multi-platform as Netflix. There are other products, but they do not come close in all 3 categories. But, I wouldn't buy the stock unless it was valued well. It's got Amazon-level insanity P/E.


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## PMREdmonton (Apr 6, 2009)

My issue is that the power-brokers here are the content owners, not the content transmitters.

Netflix has very little content that they truly own. They buy short-term licences to stream other people's products.

What happens when Apple who desperately wants to get into TV decides they would like to outbid them. What happens when the big content makers decide they can make more money by directly streaming on their own.

They do have a first-mover advantage. However, the cost of their licencing versus the fees they charge generates very little profit. They also have very little pricing power as demonstrated by what happened when they split their US services and tried to increase fees - I think they lost a ton of subscribers. 

I just don't like this business and I hate their lack of power over content and pricing power.


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## HaroldCrump (Jun 10, 2009)

PMREdmonton said:


> My issue is that the power-brokers here are the content owners, not the content transmitters.


True, but they recently signed that huge deal with Disney movie studios.
In turn, Disney is acquiring several major movie themes and franchises like the Star Wars.
This is giving Netflix access to a lot of premium content.



> What happens when Apple who desperately wants to get into TV decides they would like to outbid them. What happens when the big content makers decide they can make more money by directly streaming on their own.


It will hurt content makers more if they want to do this.
For instance, Disney has its own TV channel, but it's not as popular, and not as profitable as licensing their content to other providers.
Sure, Apple can (and does) compete in this space and will no doubt win a price war against Netflix.
But that race to the bottom will hurt Apple more, esp. once they butt heads directly with the Bells and Rogers of this space.



> I just don't like this business and I hate their lack of power over content and pricing power.


I agree with that.
This is a good trading stock given its volatility and the fickle nature of consumers.
But they do have a small "moat", good customer base, and some worthwhile assets.


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## SpIcEz (Jan 8, 2013)

Anyone keeping tabs on this stock?
I keep looking at it, wondering if its hit some kind of ceiling, but in 6 months it gained almost 200%, with 150% of that since January.

In the last five days its gone up alot also.

What worries me is the very thin margins...

Anyone else with insight?


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## Feruk (Aug 15, 2012)

The idea of the product is fantastic. The execution (at least in Canada) is brutal. The only reason I have Netflix is because I haven't bothered to cancel my account yet. In a consumer discretionary stock, I have to believe in the product. I don't believe in the product. Add lots of competition and the insane multiple, and I lose all interest.


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## jcgd (Oct 30, 2011)

I look at the insane multiple and stop there. Research goes no further.


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## rknigh2 (Jun 5, 2012)

I have it in my "short" watchlist. Sitting with other crazy valuation stocks like LNKD, AMZN, FB. I haven't bought any puts for NFLX yet, it has just too much momentum. I fully expect it to reach its highs. I just can't put my money in a 500 PE stock. At 280-300 it becomes a very attractive short candidate. 

I'm waiting for the YouTube hammer to put the nails in the coffin.


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## 1sImage (Jan 2, 2013)

Bought 12 shares on Oct 15th for $300.23... Been a wild 6 days.


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## favelle75 (Feb 6, 2013)

1sImage said:


> Bought 12 shares on Oct 15th for $300.23... Been a wild 6 days.


Its insane how much of a tear this stock has been on this past week!


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## MoreMiles (Apr 20, 2011)

Up 20% then down 20% all in the same week? This is not investing, this is gambling. You pick Big or Small and see which one comes up the next day.


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## 1sImage (Jan 2, 2013)

^yup...

Got out today @339

Didn't look for 1 hour and missed the sell off at peek. Damn job


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## WillyA (Apr 14, 2011)

Icahn killed it on this one, I must say I never saw this coming http://www.reuters.com/article/2013/10/22/us-usa-stocks-netflix-idUSBRE99L1MO20131022


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## 1sImage (Jan 2, 2013)

MoreMiles said:


> Up 20% then down 20% all in the same week? This is not investing, this is gambling. You pick Big or Small and see which one comes up the next day.


Tell that to Icahn!

Oh those billionare gamblers.


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## Toronto.gal (Jan 8, 2010)

1sImage said:


> Oh those billionare gamblers.


Forget about billionaires, they aren't on this forum. 

For the purely long-term investors, it doesn't matter what happens in a day/week/month/year, no? So what's the problem?


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## andrewf (Mar 1, 2010)

I'm not really all that interested in the share price movements--I find the business models more interesting.


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## Barneystinson (Jan 16, 2015)

Hey guys, Im new here and in the investment area in general. I bought some shares of netflix when it went down from 480$ to 360 and I was wondering if I should keep or sell? The share is now at 330 but I dont know if it will get higher or not with the HBO announcment. 

What do you guys think?

I keep or I sell?


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## fatcat (Nov 11, 2009)

i am midway through my free month and i could not be more impressed
i like it so far
i would never own the stock though since i think any single tech stock is always too risky and vulnerable to disruption
i do own it through qqq
this guy http://seekingalpha.com/news/2226426-cowen-all-in-on-netflix likes it and has a price of 382 on it


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## Barneystinson (Jan 16, 2015)

thanks for that quick response! Yes, I feel you on this one, I had fast money on that one until it began going down for no (apparent) reason since nothing changed in the past few months.


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## MrMatt (Dec 21, 2011)

Good product, horrible valuation.

The only barrier to entry is their exclusive content, while it is quite good, it isn't enough to justify a fee hike.


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## fatcat (Nov 11, 2009)

i think that what is has done is set the template for the future of content

it remembers what i watched and where i stopped watching
it gives me suggestions
i love that it moves quickly from one episode to the next

netflix is exactly how i want movies and tv shows delivered
i think $8.99 is a bargain

as an investment i am concerned that so much innovation and money is converging on that space, anything could and will happen
i don't see netflix as having anything like a "moat"


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## MrMatt (Dec 21, 2011)

fatcat said:


> i think that what is has done is set the template for the future of content
> 
> it remembers what i watched and where i stopped watching
> it gives me suggestions
> ...


The only moat Netflix has is some exclusive content, that's worth a few bucks a year.


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## NorthernRaven (Aug 4, 2010)

fatcat said:


> netflix is exactly how i want movies and tv shows delivered
> i think $8.99 is a bargain


The worry is that instead of bundling exclusive content onto channels, which are then grouped into packages by your cable company, desired content may merely be spread out amongst a number of services. So if you want to watch "House of Cards", "Game of Thrones", NFL Football, and various other shows and leagues, you may have to subscribe to future over-the-top versions of Netflix + HBO + NFL + Amazon Prime + ESPN + Hulu, etc. Some of these may be including bundles of stuff that you don't want, or overlap with the bundles of stuff included in another package. At least an extra layer of cable bundling may be eliminated, but unless some of your goodies are available a-la-carte rather than requiring a subscription, things may not necessarily turn out better.

Similarly, DVD rentals (enabled by the first sale doctrine) provided a way to obtain individual content at a lower price, especially for older material once the rental company had amortized the cost of the disc. With online viewing, the content owners can control and monetize each view directly. As an example, watching a backlist movie on iTunes or suchlike runs $4 ($3 in the US), versus the low price you could usually rent a backlist DVD at. Or $2 kiosk DVD rentals for new releases. Online is obviously more convenient, but content owners are going to look to get paid no matter what, and things are going to be interesting as they figure out what the new mix is going to be.


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## PatInTheHat (May 7, 2012)

They have earnings this week and it will be very telling as to where this stock is headed. I would never have bought and held to the point you have already but since you are already this far underwater I would cross your fingers and hope this ER is the turnaround. I would be especially concerned if it ever closes below the $300 level.


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## fatcat (Nov 11, 2009)

NorthernRaven said:


> The worry is that instead of bundling exclusive content onto channels, which are then grouped into packages by your cable company, desired content may merely be spread out amongst a number of services. So if you want to watch "House of Cards", "Game of Thrones", NFL Football, and various other shows and leagues, you may have to subscribe to future over-the-top versions of Netflix + HBO + NFL + Amazon Prime + ESPN + Hulu, etc. Some of these may be including bundles of stuff that you don't want, or overlap with the bundles of stuff included in another package. At least an extra layer of cable bundling may be eliminated, but unless some of your goodies are available a-la-carte rather than requiring a subscription, things may not necessarily turn out better.
> 
> Similarly, DVD rentals (enabled by the first sale doctrine) provided a way to obtain individual content at a lower price, especially for older material once the rental company had amortized the cost of the disc. With online viewing, the content owners can control and monetize each view directly. As an example, watching a backlist movie on iTunes or suchlike runs $4 ($3 in the US), versus the low price you could usually rent a backlist DVD at. Or $2 kiosk DVD rentals for new releases. Online is obviously more convenient, but content owners are going to look to get paid no matter what, and things are going to be interesting as they figure out what the new mix is going to be.


good points all .. i have to assume that yes, if you want everything, it will cost near as much as it does today, but if like me you only want a slice (for me it would netflix, hbo and maybe showtime) then presumably you can get that for a reasonable price, who knows ? ... i doubt that we consumers are going to be happy if we are forced into yet another overpriced model


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## PatInTheHat (May 7, 2012)

Looks very strong in the AHs. If it can open above that $396 level there is a nice big gap fill above it.


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## Rusty O'Toole (Feb 1, 2012)

Earnings today, must be good news the stock is up to 403 in after hours trading. If you want out this is as good a time as any.

Comments Karl Denninger of The Market Ticker:

One look and my first reaction to the balance sheet was "Holy sheeeit."

Ignore for a minute the fact that it appears the company has something like $9 billion in obligations for streaming content delivery (but not on the balance sheet!) against assets that are less. People will play that down, after all everyone borrows more than they have and can make, right, and it's perfectly ok to have contingent liabilities for things you are doing that aren't on the sheet, right?

No, no, here's the problem -- 19% domestic paid customer growth against 23% revenue increase. That's the price increase, but it's also a strong indication that they're pretty-much out of gas here in terms of the exponential growth curve.

International is up a lot more (73%) but the company lost more money, with marketing more than doubling (102%) and cost of revenues (direct costs) up 58%. In other words net expenses rose 67% -- with revenue rising 75%.

Ok, that's a "positive trend" I suppose, but.... lots of red ink in there internationally.

But the real nasty is in the non-GAAP free cash flow -- it's nearly ten times as negative in 2014 what it was in 2013.

What's even more interesting is that their financing costs went from positive $64 million last quarter of 2013 to negative $51 million this quarter; a swing of more than 110 million the wrong way, and on a 12 month consolidated basis it's over $200 million sucked out of the company, or more than half nominal net income!

Further the firm says it's going to issue more debt. Sure, why not! After all, with rates (very near) zero and everyone believing the band will continue to play on, may as well sell some more bonds to more suckers, er, investors.

I wouldn't touch this thing at roughly 90x earnings; as a spec play at 20x sure, but at 90x?

Not a snowball's chance in hell.

PS: IBM's report was terrible -- and arguably more-so -- as well.

Watch out folks -- financial engineering looks great right up until it doesn't, and there's a hell of a lot of it going on here.


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## Barneystinson (Jan 16, 2015)

After Q4 price went up from 330$ to 430$ but I will definitely sell those shares asap. I read a lot about the company and I dont really expect it to be as positive in the future with the competition and also the fact that most countries dont have good internet yet.


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## Rusty O'Toole (Feb 1, 2012)

$440 today. If you bought at $360 that is a nice profit.


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## Barneystinson (Jan 16, 2015)

Well after Q1 of 2015, I think I should have kept my shares a little bit longer, Up to 570$ now, gained 90$ in the last 2 days.


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## Toronto.gal (Jan 8, 2010)

Barneystinson said:


> 1. Well after Q1 of 2015, I think *I should have kept my shares a little bit longer,*
> 2. Up to 570$ now, *gained 90$ in the last 2 days.*


*1.* With a crystal ball, sure! What if this quarter had had same results as that of 2Qs ago, when the shares dropped about -25%, or around $90? It would probably have taken you back to your buying price of $360.
*2.* In the last Q of 2014, which wasn't that long ago, the stock dropped about 40% from nearly $500 to just above $300, and about $90 in a couple of days, too!

You need to be prepared to gain or lose that $90+ just as quickly for this type of stock.

One of my biggest misses, as I had come close to buying it a couple of times in the $70s. :stupid:


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## Barneystinson (Jan 16, 2015)

You are right.


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## Rusty O'Toole (Feb 1, 2012)

Netflix announced earnings after closing today. They were expected to earn 32 cents a share but actually reported earning 6 cents.

The stock closed at 98.13 today or a ridiculous 306 times expected earnings. The actual earnings of 6 cents, gives a P/E of 1635.

Netflix went UP on this extraordinary news in after hours trading, more than $10, to a high of 109.9 for a P/E of 1832.

Is this crazy or is it me? Who is buying at these prices?


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## Nordic (Dec 17, 2014)

Rusty O'Toole said:


> Netflix announced earnings after closing today. They were expected to earn 32 cents a share but actually reported earning 6 cents.
> 
> The stock closed at 98.13 today or a ridiculous 306 times expected earnings. The actual earnings of 6 cents, gives a P/E of 1635.
> 
> ...


P/E is based on 4 quarters of earnings, so I assume it's actually around 400; that said, paying that much for a company does indeed seem batshit insane. These high-priced NASDAQ stocks are the hardest hit whenever a market correction occurs.


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## Rusty O'Toole (Feb 1, 2012)

What kills me is they started with a P/E "around 400" (your words) and when they missed earnings by 80% the stock went UP.


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## tkirk62 (Jul 1, 2015)

It's just you. P/E ratios are based on yearly earnings, so of course using the 6 cent quarterly number is going to come up with an astronomical figure. They also split stock 7-for-1 so that might explain why you saw estimates of 32 cents per share. 

It's still too expensive for my tastes, just not as expensive as you believe.


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## tkirk62 (Jul 1, 2015)

Adjusted for the split earnings were expected to be 4 cents per share, so they actually beat estimates


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## Nordic (Dec 17, 2014)

tkirk62 said:


> Adjusted for the split earnings were expected to be 4 cents per share, so they actually beat estimates


Oh also Netflix share price reacts to subscriber growth/decline far greater than it does earnings (I learned that the hard way back in 2011).


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## andrewf (Mar 1, 2010)

Earnings are low because they are investing heavily in expansion. Personally, I think I would have more faith that Netflix can pay off in terms of profitability than Amazon as a growth model. Not to say that valuation is not running a bit ahead of results.


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## avrex (Nov 14, 2010)

_"Netflix soars 10.1% in after-hours trading"_

Back in Jan-Feb, I sold some call options on NFLX and lost a bundle. 
I don't understand the valuation either. I've licked my wounds and have stayed out ever since.

I will admit that it's run up has been quite astounding.
Year-to-date, the *stock has doubled in price.*
This doesn't include the gap up in price that we'll see tomorrow morning.


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## jerryhung (Mar 28, 2011)

+12% pre-market

Yes, everyone out there says to stay out due to crazy valuation, and no matter what their earnings say, it kept going UP UP UP, wow


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## Arizona (May 31, 2015)

Ridiculous valuations but to risky to short. At the same time they estimate to have over 500M subscribers by 2020!
From reports im hearing their recruiting former Pixar/Disney to develop an animation division to distribite cartoon series as well


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## Rusty O'Toole (Feb 1, 2012)

Denninger calls Netflix a "cash furnace". 

Just Because Customers Think It's Good...


... does not mean that the business is sustainable or that there is any value in the firm's stock.

The horse**** TeeVee commentators are all saying that "you can do what you want with reinvesting and you'll get your valuation" with regard to Netflix.

Really? Valuation?

There is no valuation. The truth is right here in the financials:

This company is a cash furnace; it has an accelerating burn rate on free cash flow and has been demonstrating that for the last four quarters with the last two ramping up at a ridiculously increasing rate.

Yep, I get it: Revenue went up 29% compared against last year at the same time (with paid subs up approximately the same, within a percent) and that's a nice number. But last year Netflix had positive free cash flow even if only 1.4% of revenue; sequentially free cash flow in terms of revenue has been +1.4%, -6.1%, -6%, -11.6% (!) and now -15.6% (!) and the company has said that it intends to continue this increasingly-outrageous cash burn acceleration into the indefinite future!

In other words the CEO has announced that he intends to literally burn money to "make content" at a rate that dramatically outstrips revenue gains even as he is approaching (if not having reached) saturation in the market (US) that has a positive operating margin.

This is good for increased "price targets" and accolades from people like Cramer on BubbleVision?

This isn't 1999 eh? The hell it's not; this company would not exist were it not for the cheerleaders ramping the stock price so as to make possible larger and larger debt sales necessary to fund the cash furnace they're running at their headquarters, destroying value and increasing leverage at an ever-faster rate. And oh by the way the banks that are doing that "analysis" are the ones that then turn around and sell the debt!

The amazing part of this "story" is that nobody's trying to hide any of it -- company executives openly tell you they intend to keep accelerating their negative free cash flow trend for the foreseeable future.

In many ways this is worse than 1999.


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## fatcat (Nov 11, 2009)

valuation aside, netflix is the future of tv
netflix is how we all want to watch tv
the product (and subscriber numbers) accounts for the persistent upward trajectory of the stock
amazon is the same story, amazon is how we want to buy stuff online


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## tygrus (Mar 13, 2012)

Netflix and the like are how we are going to consume all media one day.

Last week I went to Jurassic World with my wife and her parents, 4 tix, 4 pop corn, 4 coke and a couple hot doggies cost Almost $80 bucks. Thats like a year of subscription to Netflix and in the privacy of my own basement too. I don't know how movie theatres are going to survive when this takes off.


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## londoncalling (Sep 17, 2011)

There are 3 separate threads for this stock so am posting in the most current one which is still extremely old. I find it odd that a stock of this magnitude does not have much discussion. Regardless here is the msot recent quarterly report. Stock down almost 20% in aftermarket. Could make for an interesting open.

Netflix Q4 2021: Gains 8.2 Million Subscribers, Stock Down on Forecast - Variety


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## james4beach (Nov 15, 2012)

Crashed 20% after hours today. It closed the day at $500 but fell to $405 after hours.


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## doctrine (Sep 30, 2011)

I'll point out how Netflix is now a profitable business, and even generates enough cash flow to not have to borrow any more to create their content. It is expensive, at 50 times earnings (40 times after hours), but I could see a world where Netflix doubles its profits in 4-5 years. So you can actually start to put a price on the shares that gives you a positive 5 year return at a reasonable valuation. At $400, I could see Netflix giving you market returns of 8-9% a year. If it drops much further, it might become a value tech buy, however I would theorize it will not drop that much more than the 20% crash. Their moat is the $15-20 billion of growing cash they are spending every year on original content which instantly becomes worldwide distributable.


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## Covariance (Oct 20, 2020)

doctrine said:


> I'll point out how Netflix is now a profitable business, and even generates enough cash flow to not have to borrow any more to create their content. It is expensive, at 50 times earnings (40 times after hours), but I could see a world where Netflix doubles its profits in 4-5 years. So you can actually start to put a price on the shares that gives you a positive 5 year return at a reasonable valuation. At $400, I could see Netflix giving you market returns of 8-9% a year. If it drops much further, it might become a value tech buy, however I would theorize it will not drop that much more than the 20% crash. Their moat is the $15-20 billion of growing cash they are spending every year on original content which instantly becomes worldwide distributable.


Yes I am also intrigued by the turn to cash flow positive in 2022. That is a de risking event if sustainable. It puts a floor on the stock and a DCF based valuation. Strategically however I am sceptical and remain on the fence. The US market is saturated and therefore growth must come from Int'l markets. Such a growth plan requires foreign production, customization to appeal broadly. It will be interesting to see how production costs evolve (or management guides on same). The other concern strategically is they lack a direct channel. The principal competition has a relationship with the consumer through which they are layering streaming as an add on. Different economics and goals. We will see how they weather this or solve it.


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## bgc_fan (Apr 5, 2009)

doctrine said:


> I'll point out how Netflix is now a profitable business, and even generates enough cash flow to not have to borrow any more to create their content. It is expensive, at 50 times earnings (40 times after hours), but I could see a world where Netflix doubles its profits in 4-5 years. So you can actually start to put a price on the shares that gives you a positive 5 year return at a reasonable valuation. At $400, I could see Netflix giving you market returns of 8-9% a year. If it drops much further, it might become a value tech buy, however I would theorize it will not drop that much more than the 20% crash. Their moat is the $15-20 billion of growing cash they are spending every year on original content which instantly becomes worldwide distributable.


I'll bring the pessimistic POV. Disney has entered the arena and their original offerings are a lot more attractive and have gotten a large market share coming out of the blue. As for costs, they are a wash, although that's comparing the bare bones Netflix at $9.99/month vs $11.99/month or $119.99/yr for Disney Plus.

The odd time that we go to AirBnB and they have Netflix available, I'll look and maybe watch a few shows, but based on that experience, can't think of a compelling reason to subscribe.


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## bgc_fan (Apr 5, 2009)

Looks like netflix is starting to bleed subscribers and seems to be going the ad route. Go figure, raise prices and offer little new programming and people are going to jump to alternatives.








Netflix shares crater 25% after company reports it lost subscribers for the first time in more than 10 years


It's the first time the streamer has reported a subscriber loss in more than a decade.




www.cnbc.com












Netflix is exploring lower-priced, ad-supported plans after years of resisting


Co-CEO Reed Hastings has long been opposed to adding commercials or other promotions to the platform but said Tuesday that it "makes a lot of sense."




www.cnbc.com


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## scorpion_ca (Nov 3, 2014)

With that news, its down -25.73% on after hours trading.


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## londoncalling (Sep 17, 2011)

I took a look this morning to see how far it has fallen. It was around $700 back in November. Right now it's down 36% on the day and trading at $2253. It is understandable when the company has seen a decline in membership for the first time. Others have moved into the streaming space. It does not have an advantage on data analytics as apple and amazon have all our spending habit information as well. Will be interesting to see what it does going forward. I am finding a hard time finding shows to watch as they have shifted to their own content. Many of the offerings are good but are limited by only having a season or two.


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## bgc_fan (Apr 5, 2009)

londoncalling said:


> Many of the offerings are good but are limited by only having a season or two.


I think this is another factor that turns people away. They may have some original shows, but kill them after a couple of seasons which means they don't get the following to keep people attached to Netflix. As you pointed out, their moat is non-existent as others who produce content have moved into streaming like Disney, Paramount, etc. Without original, exclusive content, there's nothing to keep them locked to Netflix. Essentially, they're the new Blockbuster.


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## londoncalling (Sep 17, 2011)

bgc_fan said:


> I think this is another factor that turns people away. They may have some original shows, but kill them after a couple of seasons which means they don't get the following to keep people attached to Netflix. As you pointed out, their moat is non-existent as others who produce content have moved into streaming like Disney, Paramount, etc. Without original, exclusive content, there's nothing to keep them locked to Netflix. Essentially, they're the new Blockbuster.


Did anyone else catch the irony in Netflix becoming the new Blockbuster?

Disney and Paramount also have a long existing catalogue to utilize. Need some new content for the platform? Thow up some old cartoons or movies. Netflix has to source content from others which they do a great job of in the past for "television" series. As the like of NBC, HBO etc have added on demand streaming for their reruns this has upped the cost for Netflix as well. Aside from cracking down on multiple users of accounts I wouldn't be surprised to see additional sub price increases, advertising, bundling and premium accounts introduced to try to create new revenue streams.


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## MrMatt (Dec 21, 2011)

bgc_fan said:


> I think this is another factor that turns people away. They may have some original shows, but kill them after a couple of seasons which means they don't get the following to keep people attached to Netflix. As you pointed out, their moat is non-existent as others who produce content have moved into streaming like Disney, Paramount, etc. Without original, exclusive content, there's nothing to keep them locked to Netflix. Essentially, they're the new Blockbuster.


Netflix and Amazon are generating a lot of good original content. 
I know Netflix has a good amount of their own
I've really been liking the Amazon series lately.

The question is if it's good enough to justify the premium.

I expect that going to the Amazon Prime video, and deciding to watch a 'free on Prime' show, or rent from another service will work out good for Amazon.
I don't think Netflix can start charging for premium video content.


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## Gator13 (Jan 5, 2020)

I wish Amazon would come up with a better user interface. I find it quite clunky compared to Netflix.


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## bgc_fan (Apr 5, 2009)

londoncalling said:


> Did anyone else catch the irony in Netflix becoming the new Blockbuster?


It's a bit interesting on how that is working out. What is going on with Netflix reminds me of what the business students said about Amazon and how it would fail. They made the assumption that existing companies would push their internet presence and with their delivery infrastructure already in place, would give them the advantage. Obviously that didn't happen, but what is going with Netflix is showing that. All the content producers are moving into the streaming space and possibly pushing Netflix out.



MrMatt said:


> Netflix and Amazon are generating a lot of good original content.
> I know Netflix has a good amount of their own


Like I said, Netflix is killing themselves with their original content. They tend to have a lot of different shows, but they only last a season or two. There are a couple of problems with that: the shows never end up lasting long enough to draw a following, and they don't end up completing stories. From a financial point of view, it's pretty bad since the start up costs for a new show is pretty high for the first year, but then incremental for following years. They may have some comedy specials and cheap game shows like Is it Cake? But is that really going to hold the subscribers? They may have movies, but looking at the cost benefit, was it really worth $300M to make Red Notice?

Others like Disney make back money through merchandise, media sells, and theatre take. Netflix doesn't do that and all they really have as their income source are subscriptions. Amazon has other revenue streams and rents movies in addition to the freebies from Amazon Prime.


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## MrMatt (Dec 21, 2011)

bgc_fan said:


> Like I said, Netflix is killing themselves with their original content. They tend to have a lot of different shows, but they only last a season or two. There are a couple of problems with that: the shows never end up lasting long enough to draw a following, and they don't end up completing stories.


Lost in space was excellent. House of Cards was also outstanding.
Cobra Kai was pretty good.

Stranger things was/is very popular The Crown. etc.
The teen stuff is also quite popular, but that's really outside my zone of competence.

I think they have enough original content to justify the price, I also think Amazon Prime does.


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## bgc_fan (Apr 5, 2009)

MrMatt said:


> Lost in space was excellent. House of Cards was also outstanding.
> Cobra Kai was pretty good.
> 
> Stranger things was/is very popular The Crown. etc.
> ...


Except you are overlooking the problem, which is that the majority of the Netflix offerings are fairly short and many haven't reached the point of being "must-see TV" so to speak. You can look at Paramount+ which basically is basing the service around the Star Trek property. Or Disney+ with almost everything else. HBO has Game of Thrones, and the DC universe. What property does Netflix have that they can use to anchor their base subscribers? House of Cards was one, and Orange is the New Black, but nothing really as a franchise. You can take a look at their past series and works and see that they rarely pass the 2 year mark. https://en.wikipedia.org/wiki/List_of_ended_Netflix_original_programming#Drama


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## MrMatt (Dec 21, 2011)

bgc_fan said:


> Except you are overlooking the problem, which is that the majority of the Netflix offerings are fairly short and many haven't reached the point of being "must-see TV" so to speak. You can look at Paramount+ which basically is basing the service around the Star Trek property. Or Disney+ with almost everything else. HBO has Game of Thrones, and the DC universe. What property does Netflix have that they can use to anchor their base subscribers? House of Cards was one, and Orange is the New Black, but nothing really as a franchise. You can take a look at their past series and works and see that they rarely pass the 2 year mark. https://en.wikipedia.org/wiki/List_of_ended_Netflix_original_programming#Drama


I'm happy to pay for the service if I get 2 or 3 good series per year.


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## bgc_fan (Apr 5, 2009)

MrMatt said:


> I'm happy to pay for the service if I get 2 or 3 good series per year.


I'm sure that's true for you. But for the majority, probably not. Part of the issue is that Netflix has pretty much gotten as far as it can in Canada, in that whoever wants it, already subscribes to it. But there's nothing to attract new people. Maybe they can expand subscribers in other countries, but in some markets, it pretty much looks like it can only go downhill.


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## MrMatt (Dec 21, 2011)

bgc_fan said:


> I'm sure that's true for you. But for the majority, probably not. Part of the issue is that Netflix has pretty much gotten as far as it can in Canada, in that whoever wants it, already subscribes to it. But there's nothing to attract new people. Maybe they can expand subscribers in other countries, but in some markets, it pretty much looks like it can only go downhill.


I think that's true for streaming in general. I've thought about adding a service for a single service, and always decided not to.

Disney can attract an audience, the Marvel Universe and Star Wars are incredibly strong franchises. Otherwise I don't see any of the services differentiating themselves.

If you already have Prime, that's a decent basic service and really removes the incentive to go for another.


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## bgc_fan (Apr 5, 2009)

MrMatt said:


> I think that's true for streaming in general. I've thought about adding a service for a single service, and always decided not to.
> 
> Disney can attract an audience, the Marvel Universe and Star Wars are incredibly strong franchises. Otherwise I don't see any of the services differentiating themselves.
> 
> If you already have Prime, that's a decent basic service and really removes the incentive to go for another.


And those two points about Disney and Amazon are why Netflix may be on a downhill slope, unless they can think of a why to keep subscribers and raising monthly fees is not going to be a way to do that.


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## MrMatt (Dec 21, 2011)

bgc_fan said:


> And those two points about Disney and Amazon are why Netflix may be on a downhill slope, unless they can think of a why to keep subscribers and raising monthly fees is not going to be a way to do that.


But I think for many people, they keep Netflix out of habit, just like the old cable subscription. 

Also I have a 4k TV, which is really cool for Disney, but I'm not paying netflix more just for 4k.


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## Raggedy Dandy (Mar 12, 2020)

bgc_fan said:


> And those two points about Disney and Amazon are why Netflix may be on a downhill slope, unless they can think of a why to keep subscribers and raising monthly fees is not going to be a way to do that.


Raising monthly fees, AND adding advertising...The idea of paying for the privilege of being served ads really grates on me. I'm paying for a premium service specifically so I don't get ads thrown in my face. 

I live in the most populated part of Canada, and down by the lake on top of that. I can throw an antenna on my roof and get HD major network broadcasts from Canada and the US for free. I'll take ads from that as part of the social contract.


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## Raggedy Dandy (Mar 12, 2020)

bgc_fan said:


> They may have some comedy specials and cheap game shows like Is it Cake?


I really hope they aren't relying on things like Is It Cake. We watch that with our 8yo daughter. She thinks it's funny. But she's 8. It's most likely a training ground for the D-team on the production side and the host, because the production value is absolute garbage. It's cheap (for them), and it shows.


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## bgc_fan (Apr 5, 2009)

MrMatt said:


> But I think for many people, they keep Netflix out of habit, just like the old cable subscription.
> 
> Also I have a 4k TV, which is really cool for Disney, but I'm not paying netflix more just for 4k.


And when they start increasing the monthly fees, along with other inflationary pressures, people are going to evaluate where they can cost-cut. That's where Netflix may fall if they aren't offering anything of value.


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## bgc_fan (Apr 5, 2009)

Raggedy Dandy said:


> Raising monthly fees, AND adding advertising...The idea of paying for the privilege of being served ads really grates on me. I'm paying for a premium service specifically so I don't get ads thrown in my face.


It's kind of funny that they are considering this when it was supposed to be their main draw, not having advertising. But, they've got to make their money. OTOH, I think some of the other streaming services push ads, although their subscription costs are lower.



Raggedy Dandy said:


> I really hope they aren't relying on things like Is It Cake. We watch that with our 8yo daughter. She thinks it's funny. But she's 8. It's most likely a training ground for the D-team on the production side and the host, because the production value is absolute garbage. It's cheap (for them), and it shows.


It's been the trend to these sort of cheap shows like reality TV. They are a lot cheaper to produce than scripted TV and you get some original content. May not be great content, but will appeal to some people. Like I said before, Red Notice cost $300M for a 2 hr (?) movie. What would a whole season of Is it cake cost? Less than a few hundred thousand (just guessing).


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## doctrine (Sep 30, 2011)

We have Prime Video because we have a Prime subscription, and I would say it generally sucks pretty bad. What a terrible interface, and you are subjected to advertising for certain shows. 

Netflix is not perfect but it continues to be the best value for money out there in the streaming world. It may be that the streaming market has reached near peak penetration. There is a lot of fragmentation, and a lot of assumptions on eating losses to grow scale. Not all of them will survive, but Netflix will and it is also self-funding and cash flow positive and very profitable, so I would suggest they have the resources to compete.


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## gardner (Feb 13, 2014)

Raggedy Dandy said:


> Raising monthly fees, AND adding advertising...The idea of paying for the privilege of being served ads really grates on me.


Yes, this one could well be a deal breaker for me. I guess it remains to be seen what they actually do. In Prime you get a skipable ad at the start of every show, but it's only promoting other shows -- never external advertising. I can put up with that, I guess, but that would not really help with revenue.


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## gardner (Feb 13, 2014)

They are at 214 and a PE of 19 this morning -- almost a reasonable valuation. I wonder if they will be a buyout target. Disney could double their subscriptions in one go.


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## Money172375 (Jun 29, 2018)

We just got Crave as part of a Negotiated group rate. I think I’m liking it more than Netflix.


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## Gator13 (Jan 5, 2020)

doctrine said:


> We have Prime Video .......... What a terrible interface, and you are subjected to advertising for certain shows.


My sentiments exactly. I m not sure you could come up with a clunkier interface. It's brutal.


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## londoncalling (Sep 17, 2011)

The clunky interface often has me watching netflix reruns by default over navigating through a ton of shows that require a subscription. I did run the 30 day trial for a few options which was great but not enough to get me to add them to our package. Felt too much like the days of cable bundling.


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## sags (May 15, 2010)

Netflix has some great series that are very popular......like Ozark and Fargo, but they take forever to produce the next season episodes.

Then when they finally come out people binge watch them in a few days or a week.

To keep people's attention they need 52 wildly popular series that each produce a new series one after another every week.

Otherwise......the problem with all streaming is people binge watch the content and then sit around waiting for something new.

Kids don't care how many times they watch the same shows........which is why Disney and Youtube are so popular with them.

Maybe it is already possible, but I would like to filter out all the bollywood content.


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## andrewf (Mar 1, 2010)

Gator13 said:


> My sentiments exactly. I m not sure you could come up with a clunkier interface. It's brutal.


Considering Amazon is a software company, I am astonished at how awful Prime Video is for user experience. They don't even have to invent the wheel -- Netflix shows what works, even if there are things that I find annoying about it.

I want a streaming service to allow you to mark content as 'viewed' or 'not interested' (such as 'is it cake) and not suggest it to you. I hate scrolling through netflix and trudging through things I've already watched or have no interest in viewing. Of course, I know why they don't do this--they don't want their shelves to seem bare.


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## kcowan2000 (Mar 24, 2020)

I am surprised they have never cracked down on subscription sharing. Two simultaneous IP addresses should be enough for most people. They estimated there are a million cheaters.


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## andrewf (Mar 1, 2010)

kcowan2000 said:


> I am surprised they have never cracked down on subscription sharing. Two simultaneous IP addresses should be enough for most people. They estimated there are a million cheaters.


When it was mostly third party content, I don't think they had a lot of incentive to clamp down on plan-sharers. Besides, many sharers had upgraded to family plans. So the incrementality of clamping down on sharing is probably not that great.

I'm not even sure how well they will be able to clamp down on account sharing without being incredibly irritating. Are they going to make you enter a 2FA code every time you sit down to watch a show?


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## Spudd (Oct 11, 2011)

andrewf said:


> When it was mostly third party content, I don't think they had a lot of incentive to clamp down on plan-sharers. Besides, many sharers had upgraded to family plans. So the incrementality of clamping down on sharing is probably not that great.
> 
> I'm not even sure how well they will be able to clamp down on account sharing without being incredibly irritating. Are they going to make you enter a 2FA code every time you sit down to watch a show?


It's tricky. My first thought was they'd check the 2nd screen that logs in has the same IP address as the first (for simultaneous viewing). But I am not sure how you'd verify the 2nd screen if it's legitimately from a different IP - like my husband and I legitimately share an account but he wants to watch on his lunch break at work while I'm watching at home. If they pop up a thing for me to verify, I'll still verify, regardless of whether I'm engaging in illegitimate sharing or not.


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