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Netflix's New Chapter

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Re: Netflix's New Chapter

#21

Post by darth_avocado »

zamadatix wrote: post #11
no_wizard wrote: post #7

I'm gonna attempt to break this down: - Netflix has 5-6 Billion USD free cash flow, and because they got what debt they do have under favorable terms, they are positioned to retain most of that free cash flow - Disney, Comcast (Peacock), CBS/Viacom and other media corporations are saddled with debt, and are all losing money on their own independent streaming businesses. Likely untenable in their shareholder model - T…

What I don't understand is how e.g. Disney+ is losing so much money. It's Disney's content, has an enormous userbase, and somehow is bleeding billions?

> It’s Disney’s content

That is partly the problem. You spend hundreds of millions to make blockbuster movies and then release it on Disney+ in a few months for free (or sometimes directly). That costs money. Add to that over reliance on only Disney content creates two problems:

1. You can’t have enough new content every month, subscribers therefore don’t keep the subscription year round.

2. You have to pay money to create content. Vs the ability to buy content for cheap or add it for a few months.

On top of that, Disney overseas also includes live sports in their packages which can get expensive.

Re: Netflix's New Chapter

#22

Post by phphphphp »

zamadatix wrote: post #11
no_wizard wrote: post #7

I'm gonna attempt to break this down: - Netflix has 5-6 Billion USD free cash flow, and because they got what debt they do have under favorable terms, they are positioned to retain most of that free cash flow - Disney, Comcast (Peacock), CBS/Viacom and other media corporations are saddled with debt, and are all losing money on their own independent streaming businesses. Likely untenable in their shareholder model - T…

What I don't understand is how e.g. Disney+ is losing so much money. It's Disney's content, has an enormous userbase, and somehow is bleeding billions?

Content is expensive to produce. Disney+ is not just a streaming platform for existing Disney content, rather, Disney produce content for it. Likewise, Netflix spends most of its money on content, operating the actual platform is comparatively cheap.

Re: Netflix's New Chapter

#23

Post by no_wizard »

matwood wrote: post #17
no_wizard wrote: post #7

I'm gonna attempt to break this down: - Netflix has 5-6 Billion USD free cash flow, and because they got what debt they do have under favorable terms, they are positioned to retain most of that free cash flow - Disney, Comcast (Peacock), CBS/Viacom and other media corporations are saddled with debt, and are all losing money on their own independent streaming businesses. Likely untenable in their shareholder model - T…

Good summary. Couple notes/IMOs... HBO Max is great, but it's tied to a terrible management/company anchor. Rumor is now they are going to drop the trusted HBO brand smh. Netflix is well positioned, but a player like Disney is also setup to acquire other streamers as they fall over from cost structure issues. I think we're about to see mass consolidation. Finally, I'm kind of sad that I think the content 'golden era'…

On the content of HBO Max:

Its been very hit or miss for me with HBO Max originals. HBO (they do brand them differently) originals are still stellar, for the most part.

If the new Velma show is any indicator of what HBO Max wants to do as run of the mill content though, I'm wondering how long it'll hold up as a premium streaming service.

Warner didn't even unlock their entire backlog of Looney Toons cartoons on their own streaming service, which would bolster its brand and make it more sticky

Re: Netflix's New Chapter

#24

Post by criddell »

enumjorge wrote: post #12

Sort of an aside question, but the article praises Hastings ability to execute: > To say that Hastings excelled at execution is a dramatic understatement; indeed, the speed with which the company rolled out its advertising product in 2022[...] is a testament that Hastings’ imprint on the company’s ability to execute remains. Is there a place where one could read details on what made him so great at execution?

I don’t know if it has anything to do with his business acumen, but he was a pretty talented software developer. I originally knew of him from the Purify memory debugger.

Re: Netflix's New Chapter

#25

Post by jedberg »

Waterluvian wrote: post #6
jedberg wrote: post #3

Netflix only lost to Blockbuster because Blockbuster didn't believe in online anything strongly enough to properly fund it. Blockbuster had the better network and better penetration, and even had equally good technology. But corporate didn't want to fund them to hire the next set of engineers they needed. Blockbuster would have won if their board had been just slightly more forward looking. And Netflix knew it.

Isn't this the Sears case again? They were the veteran incumbent with a mountain of experience in the industry, but turning a corporate ship on a dime seems to be impossible. I guess that manifests as a form of "corporate didn't believe in..." or "didn't invest in the engineering" as you say.

It was worse than that though. They had already built a second ship pointed in the right direction, it just needed a little bit of extra fuel. They had already innovated.

Re: Netflix's New Chapter

#26

Post by cjrp »

zamadatix wrote: post #11
no_wizard wrote: post #7

I'm gonna attempt to break this down: - Netflix has 5-6 Billion USD free cash flow, and because they got what debt they do have under favorable terms, they are positioned to retain most of that free cash flow - Disney, Comcast (Peacock), CBS/Viacom and other media corporations are saddled with debt, and are all losing money on their own independent streaming businesses. Likely untenable in their shareholder model - T…

What I don't understand is how e.g. Disney+ is losing so much money. It's Disney's content, has an enormous userbase, and somehow is bleeding billions?

Is it possible that Disney (Walt Disney Co) makes more money by providing its content via Disney+ rather than in theatres/via other streaming platforms? So while Disney+ itself might be losing money, Disney as a whole is benefiting.

Re: Netflix's New Chapter

#27

Post by gumby »

thiago_fm wrote: post #16

Something I don't understand is why Disney and others need to have their own streaming service. Why Netflix can't sit down with Disney and merge the two streaming services. Disney is amazing at making content, so is Netflix at the moment. They could take a look at the present, their market cap, debt and so on and structure a solution that would: 1. Make Netflix the best streaming service with the best content, also b…

There are mergers and consolidations to come, that's for sure, but it would make no sense for Disney to do a deal with Netflix.

Netflix is a pure play. Disney+ is part of a somewhat integrated business: streaming, theatre, toys, theme parks, cruises each advertise and reinforce each other. Everything they do is a cross sell. And though I don't personally enjoy most of their output, I see it as generally very high quality.

During COVID things got out of whack, with streaming being a significant, high-growth source of revenue while in-person revenue streams languished.

The right way to think of Disney streaming is (ultimately) a low cost way to scoop up residual revenues. They put a film in theatres and can do hundreds of millions, and even billions in revenue. Then stick it on streaming (marginal cost for subscribers and Disney: essentially $0). Take it off streaming, sell disks. Put back on streaming. Repeat.

The thing Disney and Netflix have in common is high quality software and deployment, head and shoulders above anyone else. But that's about it.

Re: Netflix's New Chapter

#28

Post by e40 »

no_wizard wrote: post #14
b112 wrote: post #10

Earlier quoted context omitted.

HBO / Netflix merger FTW?

That would now mean buying out WarnerMedia Discovery Group which just merged, and WarnerMedia was the owner of HBO before that. AT&T was forced to divest at least. Never the less, that would be a massive acquisition, they carry alot of debt.

$53B in debt at HBO. Crazy.

Re: Netflix's New Chapter

#29

Post by BobbyJo »

Waterluvian wrote: post #6
jedberg wrote: post #3

Netflix only lost to Blockbuster because Blockbuster didn't believe in online anything strongly enough to properly fund it. Blockbuster had the better network and better penetration, and even had equally good technology. But corporate didn't want to fund them to hire the next set of engineers they needed. Blockbuster would have won if their board had been just slightly more forward looking. And Netflix knew it.

Isn't this the Sears case again? They were the veteran incumbent with a mountain of experience in the industry, but turning a corporate ship on a dime seems to be impossible. I guess that manifests as a form of "corporate didn't believe in..." or "didn't invest in the engineering" as you say.

You can keep the shareholder calls easy for now by just keeping costs low and praying. If you suddenly add a new high cost department that isn't going to be pulling in revenue for 12+ months, those calls are going to get harder, and you need to have the clout with your investors to convince them it's the right more. If you're a hired CEO who's done nothing but tweak logistics and optimize inventory, then they aren't going to trust that you are making the correct move when it comes to completely changing customer acquisition and product delivery.

Re: Netflix's New Chapter

#30

Post by jedberg »

no_wizard wrote: post #7

I'm gonna attempt to break this down: - Netflix has 5-6 Billion USD free cash flow, and because they got what debt they do have under favorable terms, they are positioned to retain most of that free cash flow - Disney, Comcast (Peacock), CBS/Viacom and other media corporations are saddled with debt, and are all losing money on their own independent streaming businesses. Likely untenable in their shareholder model - T…

> This also fails to account for the strength of HBO Max (very strong sub numbers)

It's important to note that those numbers are very juiced. For example, my HBOMax comes for free with my AT&T internet (still). I've never paid them a dime directly. When they first started they were basically giving away accounts like crazy to get growth. I think they also gave free accounts to their cable subscribers.

So while their numbers look really big on paper they aren't getting a lot of income from those subscribers.

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