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NETFLIX

edited April 20 in Other Investing
Lost subscribers for the first time ever during the first quarter. Double-digit stock loss yesterday and down over 38% today. Lots of reasons of course. To begin with, the stock is well know for running to extremes on both the up and down sides.

But the “experts” jabbering on Bloomberg today are, IMHO, all missing the “elephant in the room”, lending a comedic air to the commentary. I think the root of NETFLIX’s subscriber loss is the legalization of online sports betting across much of the country. With a few dollars riding on a sports contest people are viewing more and more sports programming and less of the NETFLIX / Disney type offerings. Hastings himself has bemoaned the lack of sports programming in NETFLIX’s lineup. And … I believe the trend toward more sports betting / sports viewing will continue.

All of the above said, when I see anything down 40% I start to salivate. But in this case I’ll not touch the online streaming menu.

Comments

  • edited April 20
    A root cause is defined as a factor that caused a nonconformance and should be permanently eliminated through process improvement. The root cause is the core issue—the highest-level cause—that sets in motion the entire cause-and-effect reaction that ultimately leads to the problem(s).

    Here's the NYT article on the topic that provides a slightly different take on the causes. I did not see a mention of "the legalization of online sports betting across much of the country" but may have missed it?

    https://www.nytimes.com/2022/04/19/business/netflix-earnings-q1.html#:~:text=In a letter to shareholders,and other emerging streaming services.

    Excerpt:

    ...In a letter to shareholders, Netflix attributed its subscriber loss to a number of factors, including a slowdown in the adoption of broadband and smart TVs; password sharing among households; and increased competition from both traditional cable and broadcast TV and other emerging streaming services. It also cited macroeconomic factors including increased inflation and Russia’s invasion of Ukraine, which prompted Netflix to shut down its service in Russia, reversing the modest subscriber growth in the European region by a loss of 700,000 Russian accounts.

    But a changing landscape in streaming may also be at play...
  • I bought a little at 220 this morning. I'm a sucker but just having fun.
  • edited April 20
    MikeM said:

    I bought a little at 220 this morning. I'm a sucker but just having fun.

    +1

    Unloaded 50% of my recent DKNG acquisitions yesterday on a nice bounce. Lowered my average cost to $16.75. But it’s having a “sissy fit” today - off 5%.

    Watching - At $15 - $15.50 I’d buy some more …

    We need a new investment category at MFO called “Crapshoots”:)
  • edited April 20
    Quick... without looking... name (5) "current" shows or movies only on Netflix that you binge watch or can't miss.

    If you are unable to do that, you have your answer. Content is king.

    Spending more than 14 billion on content "should" make you the clear winner.

    Edit Add: "...In a letter to shareholders, Netflix attributed its subscriber loss to a number of factors, including a slowdown in the adoption of broadband and smart TVs; password sharing among households; and increased competition from both traditional cable and broadcast TV and other emerging streaming services. It also cited macroeconomic factors including increased inflation and Russia’s invasion of Ukraine, which prompted Netflix to shut down its service in Russia, reversing the modest subscriber growth in the European region by a loss of 700,000 Russian accounts." <-- This is commonly known as the EBTKS method of explanation. What's concerning is that other than the invasion, none of this information is new or should be new to management.
  • FWIIW, our family practices rampant password sharing. If the company adopts two-factor authorization, some people won’t be viewers. The question is whether they will sign up for a subscription.
  • As JonGaltIII observed, "Content is king".

    Many years ago, when Netflix had the option of subscribing via DVDs, we were subscribers because of the huge variety and depth of content, much of which was not "mainstream". When Netflix went streaming-only, we dropped the subscription because we didn't do streaming at that time.

    Last year we again subscribed to Netflix, hoping to resume viewing content which interests us. We cancelled after one month: nothing that Netflix now offers is of the slightest interest to us as viewers.

    I completely understand that our viewing interests are hardly universal, and that Netflix is going for the mass audience. Nonetheless, I would think that the costs of content delivered via streaming would be significantly less than via mailed DVDs. The fact that content that we would happily pay for is no longer available suggests that Netflix management simply made a decision to ignore a certain segment of the potential market.

    After cancellation they bombarded us with repeated offers for renewal. However, at no time did they bother to inquire as to why we had cancelled. Literally, they don't have a clue.

  • edited April 20
    @Old_Joe has it in one bundle. Agreed. 100%. I'm in the same camp. We don't even have cable here. We use a Roku thingy. And 90% of the time watching, the NEWS is on. We have 3 choices for worldwide news on one channel: Al Jazeera, TRT (Turkish Radio & TV) and Bloomberg. And CTV from Canada, but every time I try it, "there are no LIVE programs available. Please try later." ..... After hunting and pecking around, I uncovered where some other news outlets are located in the line-up: CBS, ABC. CNN. Rarely, I can find some old favorite movies and documentaries.

    Netflix? Full of Korean chic-flix, romantic comedies, aimed at 14 year-olds. I watch Daniel Craig and Judy Dench. "James Bond." Only two choices. I re-watched "The Imitation Game" recently. But it's very difficult to find anything NEW that appeals. My demographic is not on their radar.... And as for a password-sharing crackdown? LOL Does Netflix think we cannot live without them? We are sharing a friend's password, already. If it goes away tomorrow, it won't be missed.
  • "aimed at 14 year-olds"
    Exactly!
  • The universe of streaming stocks all took a dive in sympathy. Once WBD (Warner Bros Discovery) settles from the AT&T spin off and today's slide, I'll be adding more. "Content is King", and I think they'll be significantly higher in a year as a result.
  • edited April 20

    Quick... without looking... name (5) "current" shows or movies only on Netflix that you binge watch or can't miss.

    If you are unable to do that, you have your answer. Content is king.

    Spending more than 14 billion on content "should" make you the clear winner.

    Edit Add: "...In a letter to shareholders, Netflix attributed its subscriber loss to a number of factors, including a slowdown in the adoption of broadband and smart TVs; password sharing among households; and increased competition from both traditional cable and broadcast TV and other emerging streaming services. It also cited macroeconomic factors including increased inflation and Russia’s invasion of Ukraine, which prompted Netflix to shut down its service in Russia, reversing the modest subscriber growth in the European region by a loss of 700,000 Russian accounts." <-- This is commonly known as the EBTKS method of explanation. What's concerning is that other than the invasion, none of this information is new or should be new to management. </p>

    Well, not quite Everything But The Kitchen Sink...

    NO direct mention in the NFLX statement of the OP's suggestion (commonly known as the WAG method of explanation?) of the root cause, and one of two reasons why I posted the article and excerpt.

    The other reason is I've found it's usually a good thing (for me at least) to do at least a little reading/research on a topic (unless you're an expert, of course) that one openly comments on but of which one may have little real understanding/knowledge.

    Granted, the OP did at least get a conversation started on the stock of the day.
  • edited April 20
    hank said:

    IMHO, all missing the “elephant in the room” … I think the root of NETFLIX’s subscriber loss is the legalization of online sports betting across much of the country. With a few dollars riding on a sports contest people are viewing more and more sports programming …

    Humble: “reflecting, expressing, or offered in a spirit of deference or submission, ranking low in a hierarchy or scale, insignificant, unpretentious”

    Opinion: “a belief stronger than impression and less strong than positive knowledge”


    Definitions from: Merriam-Webster

  • I once had a Netflix subscription. Paid for it and everything! Time after time I would scroll through dozens and dozens of their offerings looking for something that might interest me. The phrase "needle in a haystack" now comes to mind. I often thought that more great content must be in there somewhere and I was just too obtuse to find it. Well, either that is in fact the case or no, stuff that might be of interest to me is not in there. Even if it were free I wouldn't bother to tune in. Consequently I dropped my subscription at least two price rises ago. I'm not sure Netflix management understands how "optional" they are and with just a few missteps, in terms of pricing or content, things might implode.
  • "Even if it were free I wouldn't bother to tune in."

    Same here.
  • ditto.
  • When they came out recently with a pregnant man s big belly- it was th e last straw- I dont need their constant woke agenda-cancel!!
  • edited April 24
    Remember Newton Minow …..?
  • hank said:

    Remember Newton Minow …..?

    It's truer than ever, yes. Damn shame.... What could have been...

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