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Netflix’s bad habits have caught up with it

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Re: Netflix’s bad habits have caught up with it

#141

Post by seoaeu »

daenz wrote: post #135
seoaeu wrote: post #100

Earlier quoted context omitted.

The question is asked like it is some sort of gotcha, but there are clear answers for both the general proposals floating around: (a) wealth tax. Every year each household with over $XX million in net worth pays y% of the amount above the threshold in taxes. No refund if your net worth goes down in subsequent years. (b) treat unrealized capital gains as income. Each year you pay income taxes on the increase in the va…

Walk me through it. Year 1, I own 10,000 shares at $0.1 each. I'm taxed 25% of $1000, or $250. Year 2, my super smart investment pays off and I own 10,000 shares at $100 each. I'm taxed 25% of an "income" of $999,000, or $249,750. Only, I don't have enough cash to cover the bill, so I sell about a quarter of my stock, leaving me with 7,500 shares. Year 3, the stock goes bust down to $0.2 per share. I write off a loss…

Yes, you can keep writing off the loss in year 4, 5, 6, etc. until you’ve earned back $997,500. So another way of looking at it is that you prepaid $250,000 of taxes. Obviously not a desired outcome, but at least a reasonably fair one.

Also worth pointing out that under the current taxes rules the exact same thing would happen if you’d sold all your shares after year two and then invested all the profits into an ill-fated second company.

Re: Netflix’s bad habits have caught up with it

#142

Post by GekkePrutser »

walrus01 wrote: post #45
harha wrote: post #28

Netflix really had a value proposition a few years ago before all the other players came in. A good selection of rotating movies and shows, sharing accounts with a good model (# of simultaneously running screens). This was way better than cable TV and more convenient than torrent. Now it’s mostly quite mediocre content across services that easily cost $100+ a month, so we’re back to the old cable days in terms of cos…

I know a number of people who have just gone back to torrenting everything they care about (such as For All Mankind or Foundation) and are very unlikely to ever subscribe to a 2nd, 3rd, 4th streaming service. They either picked netflix and have stayed with it at $22/mo or have changed from netflix to 1 other service like paramount+ or whatever, but the idea of paying $50-60-80 a month for more services on top of thei…

I'm seeing that a lot too. Netflix killed piracy with price and more importantly convenience. But the extreme fragmentation of the streaming market is driving people back to the torrents. They don't want to sign up somewhere for every new show that they hear about.

The industry is killing itself this way. Netflix is just the first to take the hit because they have the largest market saturation.

Re: Netflix’s bad habits have caught up with it

#143

Post by Gys »

ramraj07 wrote: post #83
bumper_crop wrote: post #35

Earlier quoted context omitted.

>The consumers just aren’t complete idiots. The consumers kinda are the idiots here. They know what they like, but they have no idea why the content is getting worse. Why shows are being pulled. Companies that had their content on Netflix realized they were facing an existential crisis. Ever played Settlers of Catan and find out another player had 9/10 victory points? Everyone does everything in their power to not tr…

While it is a valid point, Id argue that Netflix could have survived this - they had billions of dollars to create original content, and then they did create it, but some how screwed it all up. There’s at best 1 or 2 good show and no good movie Netflix has made in years. And anything half decent they cancel mercilessly without giving it a chance. This is not just in the US. The comparison of original content quality…

> and no good movie Netflix has made in years

That is very subjective. My wife and I really liked The power of the dog. And I am sure there are more.

Also subjective: watching Netflix every day (I do not) will end up in watching below par stuff. No service will be able to produce that much high quality content for everybody’s taste.

Re: Netflix’s bad habits have caught up with it

#144

Post by makeitdouble »

ummonk wrote: post #89
makeitdouble wrote: post #66

Earlier quoted context omitted.

I kinda wonder how long movies will continue make economic sense, at all. What we call movies are 1h30 or more of continuous contents, and in this day and age this becomes an increasingly long time to be stuck in one place doing one thing. If it’s a full hobby, like pottery or bordering why not, but for “casual” people I feel the proposition is less and less attractive.

This view seems to be contradicted by the extent to which people binge-watch shows, which involves way more than 90 minutes of continuous contents.

Binging happens on your terms, you can stop and resume on smaller units of time (e.g. 1h for western tv shows, 20 min for anime).

Worse case if you’re disrupted is you’d restart the eps you were on at a later and you’d lose less than an hour of watch time. Current movies go up to 3h…

I see as the same paradox as people watching Tiktok shorts for hours. Yes, in aggregate it could be more than several movies stuck together, but it’s order of magnitude less binding and requires less commitment.

Re: Netflix’s bad habits have caught up with it

#145

Post by dragontamer »

tomnipotent wrote: post #136
dragontamer wrote: post #127

Earlier quoted context omitted.

> Netflix can make a case that content continues to make an impact on subscription revenue over a larger window of time, and so expenses should equally be recognized in relation to the income statement. How many people are getting Netflix subscriptions to watch Bright (2017 Will Smith+Orc movie) this year? Or from a Disney perspective, how many people are getting Disney+ to watch Coco (2017 Day of the Dead 3d cartoon…

Motivation to start a subscription is irrelevant. It's what people spend their time watching that matters, and people are still watching "Bright" and "Coco" many years after release.

Netflix has lost 200,000 and expects to lose ~2-million over the next few months under its current guidance.

Does it make sense, from an accounting point of view, to have "paid" for Bright in 2017 dollars and its 2017 cash-flow? Or does it make sense to pay for "Bright" with 2022 dollars?

Its all accounting. But next year, when Netflix is down by 2.2 million customers, Netflix's 10k statement is going to be "paying" for 2018, 2019, 2020, 2021, and 2022 movies despite having much fewer customers.

In contrast, Disney+ or Disney loses 90% of their value in the 1st year, so Disney's accounting will only be paying for "Turning Red" this year and next year.

----------

It kind of sorta doesn't matter "how" accounting is done, as long as everyone understands it. Except because of this Netflix methodology, Netflix has effectively "borrowed future money", from an accounting perspective, to make 2017, 2018 and other years "look better".

Re: Netflix’s bad habits have caught up with it

#146

Post by e-dt »

lupire wrote: post #134
thrill wrote: post #2

The quoted "competing exec" is 100% wrong when he says Netflix is making a mistake ending shows after three seasons. Shows need to be pitched and run for three seasons max, period. Everyone has a life other than the show that's "hot" for the moment, from cast to writers to the source of money - the viewers. Shows that get dragged out inevitably suck. And yeah, go to weekly releases.

You are ignoring that "a season" can be 6 episodes or 30. Great shows are often 6-12 episodes for 5+years. Most streaming shows have far shorter seasons than classic TV sitcoms/dramas/soaps.

The same model is used for broadcast television in Britain - the standard British 'series' is 6-12 episodes. (Apart from soap opera, which cranks out massive amounts each year.)

Re: Netflix’s bad habits have caught up with it

#147

Post by daenz »

seoaeu wrote: post #141
daenz wrote: post #135

Earlier quoted context omitted.

Walk me through it. Year 1, I own 10,000 shares at $0.1 each. I'm taxed 25% of $1000, or $250. Year 2, my super smart investment pays off and I own 10,000 shares at $100 each. I'm taxed 25% of an "income" of $999,000, or $249,750. Only, I don't have enough cash to cover the bill, so I sell about a quarter of my stock, leaving me with 7,500 shares. Year 3, the stock goes bust down to $0.2 per share. I write off a loss…

Yes, you can keep writing off the loss in year 4, 5, 6, etc. until you’ve earned back $997,500. So another way of looking at it is that you prepaid $250,000 of taxes. Obviously not a desired outcome, but at least a reasonably fair one. Also worth pointing out that under the current taxes rules the exact same thing would happen if you’d sold all your shares after year two and then invested all the profits into an ill-…

That sounds generally reasonable then. Except the pressure to sell stock in order to pay taxes. I don't know enough to know in all the ways this is bad, but don't you generally want to keep capital with the company that needs it?

Re: Netflix’s bad habits have caught up with it

#148

Post by rhino369 »

Guthur wrote: post #61
bumper_crop wrote: post #35

Earlier quoted context omitted.

>The consumers just aren’t complete idiots. The consumers kinda are the idiots here. They know what they like, but they have no idea why the content is getting worse. Why shows are being pulled. Companies that had their content on Netflix realized they were facing an existential crisis. Ever played Settlers of Catan and find out another player had 9/10 victory points? Everyone does everything in their power to not tr…

That's not stupid consumers that's people not rightly giving a f what nonsense licensing setups requested by ip owners and enforced by a government monopoly on force. The consumer just wanted to watch the media, which is fair because they probably just spent 8 hours at some nonsense unnecessary job and would like to switch off... again. No vote no power.

You can only blame IP laws so much. Someone has to fund the production of content.

If Netflix could just take what they wanted, nobody would make anything but disposable reality TV.

Re: Netflix’s bad habits have caught up with it

#149

Post by rhino369 »

ThatPlayer wrote: post #107
bumper_crop wrote: post #99

Earlier quoted context omitted.

Consumers want high quality, entertaining content, at low cost, with little commitment, at any time. Prior to Netflix, there wasn't such an intersecting product. Now, Netflix has low quality content, but still has all the other stuff. Consumers see this, forget what life was like back in the early 2000s, and switch/sign up for several other services. It's where consumers spend their money that will result in this reg…

The issue is Netflix as it was is not sustainable. It's like plenty of VC startups, build the market at a cost, and then go down in quality so you can make a profit. Or sell the company. But they can't do that because it's already public. In fact that means earning reports and they've just recently turned cash flow positive. Like you say, consumers want high quality content. That costs money to make, and when Netflix…

For Netflix it is worse than selling at cost. They were sourcing most of their content from the companies they were putting out of business. It was unsustainable at any cost.

Until Netflix, TV production was funded by Networks paying for first run rights. The re-run/steam right were worthless unless you could get big re-run deals. So they got the rights for next to nothing and destroying the networks that paid for the content in the first place.

Re: Netflix’s bad habits have caught up with it

#150

Post by seoaeu »

daenz wrote: post #147
seoaeu wrote: post #141

Earlier quoted context omitted.

Yes, you can keep writing off the loss in year 4, 5, 6, etc. until you’ve earned back $997,500. So another way of looking at it is that you prepaid $250,000 of taxes. Obviously not a desired outcome, but at least a reasonably fair one. Also worth pointing out that under the current taxes rules the exact same thing would happen if you’d sold all your shares after year two and then invested all the profits into an ill-…

That sounds generally reasonable then. Except the pressure to sell stock in order to pay taxes. I don't know enough to know in all the ways this is bad, but don't you generally want to keep capital with the company that needs it?

Yeah the tax code generally tries to encourage holding stocks. So if it was just a question of the government getting the tax money now or later, I think most people wouldn’t want this.

However, the proposal is mostly to stop a specific tax dodge: stocks that are given as gifts/inheritance exempt both the giver and receiver from paying any capital gains taxes on profits from prior to the transfer. Combine this with tricks like taking out margin loans to fund expenses instead of selling stock, and someone can become a billionaire yet be paying next to no taxes

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