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Netflix is now worth more than $100B

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Re: Netflix is now worth more than $100B

#191

Post by virmundi »

losteric wrote: post #85
eldavido wrote: post #42

Earlier quoted context omitted.

A lot of sophisticated financial people share your thinking. The problem is there's no growth to be found anywhere. People are cheering for 3% GDP growth in the US. Interest rates are at all-time historical lows, meaning discount rates are lower than they've ever been. These macro trends have added up to an environment where people are willing to pay staggering premiums for even a remote shot at growth. It's affectin…

To what degree does income inequality, consumer debt, and rapidly rising barriers of entry to high-income fields contribute slowing GDP growth? Is there research and evidence on the subject? I'm just an engineer with basic financial survival skills... but blind intuition suggests fixing those problems is necessary for a sustainable growing economy. "Trickle-down" theory and growing inequality drains economic activity…

I'm not saying you're wrong. I understand where you're coming from. You raise good points. I think we need to add to this list one simple idea: regulation.

Housing costs are terrible. They're getting bad even in small towns like mine. There is no way that my house is worth 172k. For many, especially in California and states that followed their lead, housing cost are largely, not solely, due to regulation on new house starts. Environmental impact and associated costs make a new housing community in California on average 1 million dollars more expensive. For many, they don't even put shovel to sod.

Health in the US has a lot of this too. Governmental regulations and the AMA drive up the cost of doctors. All of this is well documented. Interestingly, the free market is coming to a possible rescue on the price of generics: https://www.nytimes.com/2018/01/18/health/drug-prices-hospit...

A good chunk of student debt is due to the government printing money for loans that students can't escape. School saw this bottomless supply and acted accordingly.

Job exporting has some factors due to regulation too. As do the others in your list.

I'm not saying that regulation is bad. I believe in free markets, not unfettered markets. However, a lot of the regulation is old, duplicative, and contradictory. It makes being a business far more complex than it should be. Regulation hampers innovation. We need to remove regulatory cruft at all levels. We need to adopt evidence based regulations.

Re: Netflix is now worth more than $100B

#192

Post by JamesBarney »

bsbechtel wrote: post #121
eldavido wrote: post #42

Earlier quoted context omitted.

A lot of sophisticated financial people share your thinking. The problem is there's no growth to be found anywhere. People are cheering for 3% GDP growth in the US. Interest rates are at all-time historical lows, meaning discount rates are lower than they've ever been. These macro trends have added up to an environment where people are willing to pay staggering premiums for even a remote shot at growth. It's affectin…

Printing money for the past decade and giving it to large banks will have that effect. It's the same as giving $100 to every person at the market and then wondering why an Apple costs $100.50. The large investment banks are consumers of public equities.

Assets can appreciate for two reasons, inflation which will increase future cash flow, or interests rates dropping which will decrease the discount rate.

Judging from low and stable inflation it's obviously the second as opposed to the first.

Re: Netflix is now worth more than $100B

#194

Post by jblow »

niyazpk wrote: post #80
aphextron wrote: post #62

Earlier quoted context omitted.

>Cryptocurrencies and ICOs. What value is being created here, exactly? There's plenty of idealistic notions being thrown around, but I've yet to see a single, real, useful product or service materialize >Applied neural networks. Same. >Automation. This is way too broad to be invested in. Of course the world is automating at a greater rate, but is this a cause for growth? Will automated factories produce more goods fo…

>> Real inflation is 10 times the official rate. ELI5 please?

Baumol predicted this 50 years ago; it's called the "cost disease".

The inflation rate for a computer with a fixed set of specs is massively negative -- it gets cheaper every year. So it is for many technological devices.

But our whole economy is a mixture of technological stuff (that drops in cost over time, i.e. negative inflation) and non-technological stuff (burritos and health care).

The overall inflation rate is an average across the entire economy. Even if you believe the reporting is not distorted (which is dubious), then the fact that there are so many goods whose prices drop quickly over time, implies that there have to be many goods and services whose prices go up much faster than "inflation" would predict. Because something has to balance that average!

Baumol calls the technological stuff the "progressive sector" and the non-technological stuff the "stagnant sector". As time goes on, prices in the stagnant sector continue to rise until they consume almost all spending.

Baumol made specific predictions based on this model in 1960 that have turned out to be consistently true for 50 years ("the cost of healthcare will continue to rise to degrees that will seem scary" and so forth).

Furthermore, it's not like it is some weird complicated or hard-to-substantiate theory. It is just math, not much more complicated than the definition of the average. Given how big the consequences are, and how hard to argue with, it surprises me that this idea occupies so little of the public conversation.

Re: Netflix is now worth more than $100B

#195

Post by yters »

bsbechtel wrote: post #121
eldavido wrote: post #42

Earlier quoted context omitted.

A lot of sophisticated financial people share your thinking. The problem is there's no growth to be found anywhere. People are cheering for 3% GDP growth in the US. Interest rates are at all-time historical lows, meaning discount rates are lower than they've ever been. These macro trends have added up to an environment where people are willing to pay staggering premiums for even a remote shot at growth. It's affectin…

Printing money for the past decade and giving it to large banks will have that effect. It's the same as giving $100 to every person at the market and then wondering why an Apple costs $100.50. The large investment banks are consumers of public equities.

With the bank bailout in 2008, our dollar was effectively halved. Probably what we are seeing now.

Re: Netflix is now worth more than $100B

#196

Post by Spooky23 »

jusonchan wrote: post #166
Spooky23 wrote: post #83

Earlier quoted context omitted.

It is amazing to me that they offered a superior interface by any measure back in the DVD days. The AppleTV interface for Netflix is a disgrace. I don’t understand how they have all of these brilliant engineers, yet make an interface worse than what Spectrum provides.

What exactly are you looking for?

A better layout. Those ribbons are difficult to use, and the app uses a different design language than most.

I also find the discovery experience to be lousy... I often don’t hear about new shows for months, although I use the app every day.

Re: Netflix is now worth more than $100B

#197

Post by xapata »

losteric wrote: post #85
eldavido wrote: post #42

Earlier quoted context omitted.

A lot of sophisticated financial people share your thinking. The problem is there's no growth to be found anywhere. People are cheering for 3% GDP growth in the US. Interest rates are at all-time historical lows, meaning discount rates are lower than they've ever been. These macro trends have added up to an environment where people are willing to pay staggering premiums for even a remote shot at growth. It's affectin…

To what degree does income inequality, consumer debt, and rapidly rising barriers of entry to high-income fields contribute slowing GDP growth? Is there research and evidence on the subject? I'm just an engineer with basic financial survival skills... but blind intuition suggests fixing those problems is necessary for a sustainable growing economy. "Trickle-down" theory and growing inequality drains economic activity…

> research and evidence

The trouble is that income/wealth inequality is often ignored in macroeconomic models. The math gets tough and an easy way to simplify the equations is to assume an equilibrium growth path. More complex models use a dynamic stochastic general equilibrium, but an equilibrium all the same.

Unfortunately, the key feature of rising inequality is that it may move the system into an unstable equilibrium. For example, if a handful of billionaires hang out together at Davos and get a bit of groupthink, they might decide to misallocate some capital (accidentally). If they make a mistake in a truly dramatic fashion, (investing heavily in Bitcoin, for example) they could evaporate a large chunk of the nation's wealth. When a handful of actors has an extreme influence on capital allocation, we've effectively become a command-economy instead of a free-market economy.

Re: Netflix is now worth more than $100B

#198

Post by mortehu »

brucephillips wrote: post #125
Spooky23 wrote: post #83

Earlier quoted context omitted.

It is amazing to me that they offered a superior interface by any measure back in the DVD days. The AppleTV interface for Netflix is a disgrace. I don’t understand how they have all of these brilliant engineers, yet make an interface worse than what Spectrum provides.

What interface do you want?

I, for one, want a Tinder-like interface. Photo, title, synopsis, production budget, main cast, etc on each page. Swipe right to add to favorites, swipe left to reject. Choices presented best first as determined by machine learning model. It would be nice to be able to train multiple models, and to mix model predictions with those of friends and family. Separate favorite lists for things already watched and things not watched yet.

Second interface: "continue watching" list, most recently viewed at the top.

Re: Netflix is now worth more than $100B

#199

Post by jkmcf »

rajacombinator wrote: post #81

Finding Netflix fairly frustrating these days. Despite their runaway success they haven’t really done anything to change the Hollywood model. 99.9% crap with a sprinkle of watchable content. And despite the hoards of engineers and machine learning wizards they employ, discovery and interface has regressed in their product. Only reason I haven’t canceled yet is avoiding the hassle of going full torrent/YouTube.

I personally find the Apple TV UI fine, not great but easy enough. However, discoverability is still horrible. It constantly shows the same recommendations over and over, including things I've just watched. You need to know what you want and then hope they have it online.

Not sure what you mean about the Hollywood model. Just about everything I've watched developed by Netflix has been above average. Maybe their junk is for things I'm not interested...

Re: Netflix is now worth more than $100B

#200

Post by eldavido »

bufferoverflow wrote: post #48
eldavido wrote: post #42

Earlier quoted context omitted.

A lot of sophisticated financial people share your thinking. The problem is there's no growth to be found anywhere. People are cheering for 3% GDP growth in the US. Interest rates are at all-time historical lows, meaning discount rates are lower than they've ever been. These macro trends have added up to an environment where people are willing to pay staggering premiums for even a remote shot at growth. It's affectin…

> The problem is there's no growth to be found anywhere. Cryptocurrencies and ICOs. Applied neural networks. Automation. Good electric cars. To the point where people are prepaying for something that might be built in a few years. Good cheap batteries.

So this actually points to a big problem with how we measure growth.

If you start from the assumption that well-being or some other desirable policy goal can be measured by income (profits, wages, etc), I'd argue most of the things in this list aren't likely to increase either wages or profits of companies.

But they are likely to create economic surplus - that thing that makes us want to trade/transact in the first place. Economic surplus is why you'd rather buy a Netflix package for $10 than rent a $3 video from the video store. You're massively better off with Netflix even though Netflix's profits and your wages haven't moved.

The problem is, we don't have a good way to measure this. Economists are aware of the problem, and it's something that makes comparison of GDP across decades difficult. There are many things that are better or flat-out new compared to what existed 50 years ago. How do you compare the experience of driving a modern, safe, smooth-driving car to an older one? Or the experience of talking cross-continent for practically nothing on Skype?

I agree that these technologies are going to reshape our world, I just don't think those gains are necessarily going to show up in GDP, at least not how we measure it today. And I also think this whole "real wages have stagnated" argument is a bit of a red herring. Maybe they have...so what. People are much, much better off today than they were even 20 years ago. We have more things, they're better in almost every way, less disease, the world is just 100% a better place, and anyone who says otherwise is just trying to push some redistributionist political agenda. I'm not saying inequality isn't a problem, but it's borderline lying to suggest our lives haven't gotten any better over the last 30 years because "real wages have stagnated".

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