Glad I sold yesterday! It was ouch enough for me as I bought in late in the game.
I suspect we will see a fair few stocks drop like this in the coming months, especially stuff that is so easy to cancel.
3 Likes
I am a former holder of NetflixâŠDespite Russia & less post covid sign ups⊠I personally think they should have increased subscription charges years ago⊠Iâve been with them since near the start and have only now seen an increase ⊠(Approx 10 years).
I also think the new money saving âtechniquesâ involving having only 1 subscription running at 1 time wont help. Eg sign to Netflix, watch everything of interest then switch to the next & repeat.
That said Iâm invested in Disney⊠They are much more than subscription TVâŠ
However Iâm definately considering buying back into Netflix, they have made some awesome TV and are building new studios as we speak, with lots of TV & Films in the pipeline ⊠Some more Squid Games, Bridgerton etc & the subscribers will be back.
They also need to look at other income streams.
3 Likes
My worry for Netflix is that two of your biggest rivals are using streaming as a value add to their existing huge businesses. Apple & Amazon donât need to make any money from AppleTV+ & Prime in the same way Netflix does.
I would have like to see Netflix tackle some different revenue streams -
Fitness market over, Netflex? For a few extra $ a month you get access to high quality workout routines.
An audio feature to play the sound track of the new show youâre watching.
Educational content and lectures
Discount for signing up for a fixed contract.
There are lots of way they could have increased their value add.
8 Likes
I remember when Netflix first started spending huge amounts of money on producing their own content, almost a decade ago now, and at the time I was confident that Netflix would find that the rate at which they needed to produce content to keep subscribers wouldnât be economically viable and so the model wouldnât last. A decade on, I think that analysis has some validity when considering Netflix as a business, but I donât think itâs particularly relevant to Netflix as a public company in the current financial climate.
Nobody really cares much about business anymore, and so the fact that Netflix hasnât found a path to profitability is not particularly important anymore. The downside is, of course, that this financial climate is one where companies are very vulnerable to wild swings in price based on (weakly held) sentiment. A tweet begets a few tweets and a few tweets beget a news article and a news article begets a few news articles and before you know it, a not-amazing earnings report is front-page news across the world and thereâs a near 40% drop in price wiping out ~$50bn because the company lost a few dozen million in revenue.
I wouldnât bet against the market because Iâm not out of my damn mind, but Iâll put my definitely very valuable and highly coveted reputation as an anonymous poster on this here forum on Netflix rebounding to $400 before the month is out (and if Iâm wrong Iâll delete this post and deny I ever made such a ridiculous bet).
6 Likes
What do you mean by âhasnât found a path to profitabilityâ? Netflix has been profitable for ages and continues to do so. 
2 Likes
I should spend less time watching Netflix and more time reading financials. I have no idea what Iâm talking about. I retract everything.
edit: wait, on what basis are you saying theyâre profitable? I just checked and theyâre still performing the same as I thought they were, theyâre still servicing their huge debts and itâs only this year that theyâve stopped borrowing to fund their content (which correlates with their slowing growth). Do you mean that their income before considering debt is greater than their costs?
1 Like
Netflix has been sounding out two ways of achieving growth, an ad-supported tier, and a crackdown on password sharing. My problem with both these options is that they make Netflix worse. Netflix gets a lot of goodwill from being ad-free and liberal with the account sharing. If they introduce an ad-supported tier, it may start off being a budget version, but very soon it will become the default, and society will collectively waste untold hours watching shampoo commercials. NowTV introduced ads last year, it is a mediocre also ran streaming service, clearly not Netflix tier.
I think Netflix still has a lot of room for growth. And I think it will come outside of English speaking markets. Netflixâs original content is far more global than its competitors. I also think theyâll switch more shows to a weekly format, so users will have to subscribe for multiple months to see a season to its conclusion. Disney+ and AppleTV have been doing this, and I think itâll be worthwhile to mix it up. Some shows benefit from that type of build up.
2 Likes
They made a profit of $1.6bn this quarter.
What are you looking for them to do?
Thanks for the cheap shares Bill!
2 Likes
Puts some of my bad share picks into perspective.
1 Like
Interesting the believe they are in an opportunity rich environmentâŠ
I share my Netflix account with family. With the price increase, sharing is currently the only reason Iâm still subscribed. And even then Iâm contemplating if itâs worth it.
If they stop people sharing accounts I wonât keep it, itâs just not worth the cost for one person.
I barely watch their own shows anymore because the vast majority of them are shallow and well, crap.
Theyâre not even keeping up with the competition on the tech side as far as I can see. Things like watch together features are basically standard on other platforms and Netflix has nothing like it.
In any case I think the price increases are putting them out of peoples price points for what you get.
So much so if actually consider dumping Netflix for a cinema pass. All the new movies as they come out, similar price as Netflix
Thatâs the perspective Iâm currently looking at it from
2 Likes
Iâm guessing you know that sharing your Netflix account across multiple households (which I think is what youâre saying) is against the terms of service anyway? So really, when you accepted the terms, itâs something you said you wouldnât do?
Thatâs the red flag imo in Netflixâs approach to the whole situation. They are not self-critical and are not addresing the big elephant in the room that is their original content is just not compelling enough to fight against HBO, Disney, Amazon etc. Instead of addresing that they are blaming it on password sharing. Removing that will only reduce their subscriber number. Just my 2 cents on the whole situation.
I still like the service and I still use it, but the management team is approaching the whole thing in a very bad way and would not touch the stock at any point in the near future.
Netflix are currently trialing two options for addressing password sharing:
-
Add an Extra Member: Option to add sub accounts for up to two people they donât live with - each with their own profile, personalized recommendations, login and password - at a lower price
-
Transfer Profile to a New Account: Enable people who share their account to transfer profile information either to a new account or an Extra Member sub account - keeping the viewing history
I canât see how either option will make much difference to family sharing as its difficult to determine if people live in the same location.
People donât usually share their Amazon Prime Video and Apple TV accounts, as they are also linked to their payment credit cards - maybe Netflix needs a similar approach.
1 Like
Would limiting the devices work?
1 Mobile and 1 Tablet per subscription
You can usually tell if TVs are in the same location so that can be geographically locked. It will also stop those using VPNs to change location
5 Likes
Oh Iâm not saying they canât block peoples use. They can do that if they want, by no means complaining about them enforcing their terms.
But they have basically never enforced it
Iâm just saying theyâd lose my money when they do. Itâs already to expensive for one person imo
I donât see this working either. The plans imo at least are already too expensive. I think this could work if they reduced the prices, but if it was more money on top of the current prices⊠itâs way to much imo
Others make a good point as well. Amazon video is basically value add to prime
Even apples offering, itâs the same price as Netflixâs highest tier and you get music, games and storage as well as their tv offering.
Get their top tier at ÂŁ30 and you get their fitness stuff (which is pretty good) and news subscriptions and itâs for 5 people not restricted to one household.
But sharing is usually between family.
Apple you donât need to share payment details, you can share services that donât require payments (like their tv offering)
Amazon you can share accounts and keep separate payments for your purchase. So for example you can share just Amazon video and your prime shopping benefits.
Both services are offered as a âfamily sharingâ service not a household service
Whoâs buying on the dip? Iâm tempted to wait as I still think there is long term opportunities here!