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Netflix loses 800,000 subscribers (stock drops 28%)

money.cnn.com

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Re: Netflix loses 800,000 subscribers (stock drops 28%)

#71

Post by jamesfrank »

cookiecaper wrote: post #54
gkoberger wrote: post #3

I feel bad for Netflix. They're between a rock and a hard place. The content providers want more money and eventually want to cut out the middleman. The users balk when the price is raised, even though unlimited streaming and DVDs for a month still cost less than a decent meal. And every decision they make (like Qwikster, which was likely done so they didn't have to pay content providers a fee for users who weren't s…

The best potential outcome of this would be accelerating potential copyright/IP reform. Netflix is destined to die unless they can find a way to diversify; as you said, the rights holders want to cut out the middle man. The overhead requisite in old-world rental chains like Blockbuster is sufficiently prohibitive that the media companies did not have an interest in supplanting that market, but now that Netflix has pr…

How would this accelerate copyright/IP reform?

Re: Netflix loses 800,000 subscribers (stock drops 28%)

#72

Post by Alex3917 »

badclient wrote: post #11
gkoberger wrote: post #3

I feel bad for Netflix. They're between a rock and a hard place. The content providers want more money and eventually want to cut out the middleman. The users balk when the price is raised, even though unlimited streaming and DVDs for a month still cost less than a decent meal. And every decision they make (like Qwikster, which was likely done so they didn't have to pay content providers a fee for users who weren't s…

still cost less than a decent meal So many great things on the web cost less than a single cup of Starbucks. Yet, I myself am so hesitant to pay for them. On my landing pages I design at work, I'm increasingly trying to communicate this via comparisons("less than a morning Starbucks trip"). Another one is showing a dollar bill to communicate that for less than a dollar a day, they will get _____. For a service that w…

"So many great things on the web cost less than a single cup of Starbucks. Yet, I myself am so hesitant to pay for them."

It's the same thing where if you add up all the things you are supposed to do each day that only take 5 - 10 minutes, you end up with like three hours worth of stuff. Flossing, meditating, abs, showering, etc.

Re: Netflix loses 800,000 subscribers (stock drops 28%)

#73

Post by wiredfool »

martythemaniak wrote: post #8

Honestly curious, where did those users go? Back to $40 shitcable? Torrenting?

I'm one of the 800k.

Essentially, I figured out that it was costing me $16/movie I watched, and that was before the price hike. So I cut it out, and given that I was watching on average, a movie every 2 months, I haven't noticed the difference. (and what's more, that's an average, and there was much more activity in a couple of bursts early one.)

Their big error for me was reminding me of the relationship between the monthly billing and how much I got out of it.

FWIW, this is the second time I've cancelled netflix. They'll probably get a third chance, if I ever feel like watching movies again.

Re: Netflix loses 800,000 subscribers (stock drops 28%)

#74

Post by cma »

gkoberger wrote: post #3

I feel bad for Netflix. They're between a rock and a hard place. The content providers want more money and eventually want to cut out the middleman. The users balk when the price is raised, even though unlimited streaming and DVDs for a month still cost less than a decent meal. And every decision they make (like Qwikster, which was likely done so they didn't have to pay content providers a fee for users who weren't s…

Qwikster would have resulted in Netflix paying more credit card fees (two credit card charges a month instead of one); there is a fixed fee for every transaction. It made no sense to try and get out of movie studio bargaining by paying credit card companies a bigger cut--if it worked for existing streaming catalog deals, it would be temporary at best.

What is going to really hit Netflix hard is the entire Starz library disappearing from Instant.

Re: Netflix loses 800,000 subscribers (stock drops 28%)

#75

Post by beedogs »

gkoberger wrote: post #3

I feel bad for Netflix. They're between a rock and a hard place. The content providers want more money and eventually want to cut out the middleman. The users balk when the price is raised, even though unlimited streaming and DVDs for a month still cost less than a decent meal. And every decision they make (like Qwikster, which was likely done so they didn't have to pay content providers a fee for users who weren't s…

Like Tivo, Netflix defined a market and then proceeded to be crowded out of it by the content producers and distributors until there was nothing left for them. I'd be worried about any company with a similar business plan.

Re: Netflix loses 800,000 subscribers (stock drops 28%)

#76

Post by gdulli »

ShabbyDoo wrote: post #9

So, Netflix increased prices by a pretty high percentage and managed to lose only four percent of subscribers? This is astoundingly impressive. Furthermore, many of these deflections might simply be the result of forcing subscribers to explicitly choose to continue service. How many people kept paying a few dollars per month for a service which they did not use and, when forced to choose a new plan, opted out?

By their own estimates, 800,000 subscribers was only the start of the bleeding. If you read the article, it says they forecast losing up to 1.5 million streaming customers and up to 2.7 million DVD subscribers in the next quarter.

Re: Netflix loses 800,000 subscribers (stock drops 28%)

#77

Post by botolo »

It is really incredible how the things are going for Netflix. Three/four months ago I was discussing with my father about shares he wanted to buy. He was losing some money on RIMM and I suggested him to buy Netflix, telling him: "Hey dad, they have the control of the streaming offer online and they are heading where the future is...no more DVDs, all streaming".

I was lucky that my father did not follow my advice (otherwise he would have killed me, eheh) and now I see the problem. As a subscriber of their streaming service, it is always very difficult for me to find something interesting in their catalog. I am also a subscriber of Hulu and I use Hulu daily for all my TV shows needs. When I want to watch a movie, Netflix does not offer me anything interesting, Hulu does not have a big catalog and I end up getting DVDs from Red Box.

Re: Netflix loses 800,000 subscribers (stock drops 28%)

#79

Post by wiredfool »

tomkarlo wrote: post #65
sudonim wrote: post #39

I was looking at purchasing shares in Netflix the first time the stock dropped. I believe at that time netflix was trading at 35x earnings. At the close today it was 30x earnings and now even lower in after hours trading. I never bought the shares because of the high multiple. However, I believe the current bad news is a blip on the radar in what will continue to be a tremendously successful company. Can someone expl…

P/E is only one metric and it's potentially very deceptive. You're using a PE that's uncorrected for expenses that are essentially investment in future business growth rather than a fundamental part of the business model. Amazon, for example, is hiring tons of new employees to build out its AWS business; that's a positive sign (it shows they believe that's a good investment) but in the short term it will drive down t…

Right, but Amazon is in a heavy infrastructure, heavy competition, low margin business. And their margins are small and getting smaller. 2% or so IIRC. They're less poised for explosive growth than Apple. On the other hand, they're here for the long haul.

Apple is spending a lot on infrastructure, but they're in a lower competition, high margin business. 38% margin IIRC. (yes, there's competition. But Amazon's competition is anyone selling anything, and Apple's is anyone who's managed to make a good smartphone.) The market hasn't been expecting Apple to grow for years now based on PE, they've been under 20 since the 2008 crash and growing their earnings like crazy. Their PE at the low point was 11ish, and now it's 14ish, less than the historical SP500 valuation.

For Comparison's sake, last quarter, Apple earned 6.8 billion. Amazon's net sales were 9.9 billion. Pretty soon, I'd expect Apple's profits to be bigger than Amazon's sales.

Something's not rational here. Might be me. Might be the market.

Re: Netflix loses 800,000 subscribers (stock drops 28%)

#80

Post by steve8918 »

sudonim wrote: post #39

I was looking at purchasing shares in Netflix the first time the stock dropped. I believe at that time netflix was trading at 35x earnings. At the close today it was 30x earnings and now even lower in after hours trading. I never bought the shares because of the high multiple. However, I believe the current bad news is a blip on the radar in what will continue to be a tremendously successful company. Can someone expl…

I jumped in at $86 after hours, with only 100 shares. They just simply got decimated after hours, but it felt pretty overdone, especially with only losing 800k customers. Seems worth it to take a stab.

That being said, the business model is doomed. They don't control the content, so they are essentially a technology company. Their technology is great, I had them for a few months, but unless they own the content they will continue to get gouged by content providers. It's a no-win situation for them.

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