Netflix's underlying "WIN"

[DesiPower]

I have been hearing about how people are dumping Netflix and they lost 800k customers and their shares are in a free fall and so on and so forth... Then a few days back I read this article and saw they lost only 800k customers out of 24 million... OMG that like ONLY 3.33%. Number of DVD customers fell from 11.3 to 10.3 million which means that decline is about 9% but people who have both are paying 60% more. Even as mentioned in the article, Netfix is not projecting a loss in revenue but a gain in revenue but not as much as predicted earlier but still more than last year's. And above that lots of hater's are going to come back eventually, so down the line things are going to get only better.

Overall I fell it was a good long term business decision by Netflix, they will come out of this just OK, and keep growing. They are now expanding even outside US.

Domestic subscribers fell to 23.8 million as of Sept. 30 from 24.6 million three months earlier, a bigger decline than the company projected in September, according to a website statement yesterday. This quarter, U.S. customers will fall short of the 24.9 million analysts were predicting.

Domestic streaming subscriptions are forecast to decline this month, level off in November and rebound in December to end at 20 million to 21.5 million, Netflix said. DVD subscriptions will fall “sharply” to 10.3 million to 11.3 million customers.

Fourth-quarter profit will be $19 million to $37 million, or 36 cents to 70 cents a share, on revenue of as much as $875 million, the company said. Analysts were projecting profit of $1.10 a share on sales of $919 million, according to Bloomberg data. The company earned $47.1 million, or 87 cents a share, on sales of $595.9 million, a year earlier.

 

[Oyeve]

Its the media trying to make netflix look like its fuckup will have serious ramifications when in reality it barely did anything at all.

 

[sunzt]

ooo... their chart may have potential

 

[zinfamous]

I think the big deal is that they were seeing steady growth in subscribers quarter after quarter. Against that, it was a huge fall.

 

[Vic Vega]

800,000 subscribers @ $8.00/month. That's $6,400,000.00 a month in revenue or $76,800,000.00 a year. This is not a small amount, even reletive to their total subscribership. The fact that the loss is solely their fault and could have been avoided is why the stock is plummeting and investors are pulling out. It shows poor leadership and impulse decision making. Their CEO needs to go - today. They need someone in there to speak to shareholders and investors and convince them that these types of knee-jerk decisions will not happen again and that Netflix isn't going to jump in and out of markets at random.

 

[Vic Vega]

Uhh, people who say it's no big deal are delirious. The stock lost 50+% of it's value. This severely limits the company's ability to raise money by issuing stock. This is how public companies pay for expansion, they issue stock, use the money to do what they need to do and gradually buy the stock back once gains from the expansion are realized. Losing this much value in their stock is incredible and a terrible thing.

 

[mugs]

And every single one of those customers who left acts like Netflix punched their child and raped their dog.

 

[DesiPower]

800,000 subscribers @ $8.00/month. That's $6,400,000.00 a month in revenue or $76,800,000.00 a year. *Snip*

Yes, but its not all loss, many subscribers are paying $16 too. That makes up for some of the loss. Who knows, overall it might a gain. Vaguely speaking there are atleast 6 million customers that have both so potentially is can be 6 x 6 = 36 million a month gain

 

[Newbian]

And every single one of those customers who left acts like Netflix punched their child and raped their dog.

It's their new streaming service.

 

[Vic Vega]

And every single one of those customers who left acts like Netflix punched their child and raped their dog.

Ya know, it doesn't matter why they left. The fact that they left is the problem. So what if their perception is flawed? They still left. Herein lies the problem. The fact that many who left are being publicly vocal about leaving is not good either. We all know how smart people are... as in, not so much, so word of mouth will cause other people to leave who aren't up on the issue. Lemming mentality at its finest.

 

[Vic Vega]

Yes, but its not all loss, many subscribers are paying $16 too. That makes up for some of the loss. Who knows, overall it might a gain.

Time will tell with the next earnings report. Losing almost a million customers in a quarter is terrible. You can't spin it, I'm afraid.

 

[Doppel]

Netflix stock price is still at a value normally reserved for very high growth companies, and since it's going to be losing money next quarter only if you believe its growth can again return to where it has been would you buy its stock at $80.

Its only competition in mail dvds with blockbuster (a piece of garbage company now for many years). In streaming there are tons of competitors, many of which are far larger companies.

I wondered yesterday if Netflix, which has clearly been a pioneer in streaming, has helped create a market that ultimately will kill it. Ironic.

 

[Farmer]

You overlook the fact that public opinion a huge affect on the day-to-day valuation and trading of public company stock. From a purely business perspective, this change may have been logical, however you'd be nuts to say it did not negatively influence the public's opinion of the competence of their leadership and of their company as a whole.

 

[slayer202]

Uhh, people who say it's no big deal are delirious. The stock lost 50+% of it's value. This severely limits the company's ability to raise money by issuing stock. This is how public companies pay for expansion, they issue stock, use the money to do what they need to do and gradually buy the stock back once gains from the expansion are realized. Losing this much value in their stock is incredible and a terrible thing.

hence, the problem with the stock market. for an individual company it may be used to raise capital, but everyone else has a different goal in mind. then the CEO has to worry more about the stock price than making the business decisions he thinks will be best for the company in the long run.

 

[dwell]

It's actually worse than it seems. Their least growth in the past four quarters still brought in 1.8M new subscribers. So with 800K leaving and losing at least 1.8M new subscribers, they are out at least 2.6M subscribers.

That's bad.

 

[Farmer]

hence, the problem with the stock market. for an individual company it may be used to raise capital, but everyone else has a different goal in mind. then the CEO has to worry more about the stock price than making the business decisions he thinks will be best for the company in the long run.

Couldn't have said it better myself.

 

[Patranus]

Content producers no longer need Netflix.
This is illustrated by the fact that Netflix severely lacks content.

 

[FoBoT]

Reed Hastings has a demon in his head

 

[Schadenfroh]

I do not blame them for raising their rates, they are having to bid crazy amounts of cash for content. Netflix is at the mercy of content providers at the end of the day.

 

[MotionMan]

And every single one of those customers who left acts like Netflix punched their child and raped their dog.

Or vice versa.

In any event, I :heart: Netflix streaming.

MotionMan

 

[slayer202]

The other day I was looking at how much I use netflix streaming. I've been a member for exactly a year yesterday. I've watched 400 hours of content. A little bit may have been my girlfriend watching something without me, but I'm sure I've been good for an average of an hour a day. That's pretty damn impressive for $8/month.

 

[PingSpike]

They really botched the rate increase though. They should have used the boiled frog strategy, it was an amateur mistake doing it all at once. But yeah, it seems like rumors of their demise are greatly exaggerated.

 

[waggy]

they didn't "win" but they sure aren't going out of business.

They fucked up. there is no doubt on that. But nearly everyone knows they had to increase prices. It's how they went about it that fucked them up. Then the Qwickster bullshit.

i can understand why they are dropping in price. I don't think it will rebound until they get a new CEO or get bought out

 

[TheAdvocate]

I wondered yesterday if Netflix, which has clearly been a pioneer in streaming, has helped create a market that ultimately will kill it. Ironic.

Isn't that the norm for "technology" (I use that term loosely) based companies?

AOL unlimited access plans?

BTW, I am now grudgingly back with Redbox. I kinda hate having to get in the car to return a movie and the selection is limited, but at least their insane proliferation scheme means I usually don't have to drive far and can usually work it into my other errands or lunch. I thought I went a little crazy in August, renting so many movies. I looked at my bank statement and I spent $16 and change. That's less than I was spending for a month with Netflix, and I rented 12 movies (there were a couple of thank you freebies in there) versus the 3 or 4 I was averaging with netflix after all the shipping and in stock delays. It's just a much better value.

 

[waggy]

Isn't that the norm for "technology" (I use that term loosely) based companies?

AOL unlimited access plans?

BTW, I am now grudgingly back with Redbox. I kinda hate having to get in the car to return a movie and the selection is limited, but at least their insane proliferation scheme means I usually don't have to drive far and can usually work it into my other errands or lunch. I thought I went a little crazy in August, renting so many movies. I looked at my bank statement and I spent $16 and change. That's less than I was spending for a month with Netflix, and I rented 12 movies (there were a couple of thank you freebies in there) versus the 3 or 4 I was averaging with netflix after all the shipping and in stock delays. It's just a much better value.

though redbox is raising prices by %20. but still a darn good deal