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NFLX - Netflix


bmichaud

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Hey all:

 

I've had Netflix for just under a year now.  I'm getting ready to drop it. 

 

I've watched what I want.  I found some good stuff that I didn't know was out there.  HOWEVER, it is starting to run dry.  I am also noticing that a lot of stuff I'm starting to watch just is not really that good.  That goes for a lot of Netflix produced content too.

 

Maybe in 6 months or a year, when good content refreshes, I'll come back for a couple/few months to watch it.

 

I also let my Hulu subscription lapse when my credit card turned over.  Hulu has some good stuff, but I've watched most of it.

 

Most of my time now I'm listening to podcasts, reading, and watching/listening to the YouTube.

 

 

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I see no lasting competitive advantage that NFLX has over AMZN -- the value prop isn't quite there, though they have been successful for content. However, content is such a flaky business, I don't know how one can keep up.

 

I'm tempted to short it :)

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I recently closed my position, but I can see it continue its move higher.

 

When I think about the value of my NFLX subscription, I look at how much the library has changed since I first subscribed. From a mathematical standpoint, they are spending multiples more and the change is noticeable. Yet, my monthly payment has gone up a buck. Furthermore, my household shares my subscription. While I won't watch anything for periods, others do. So it's hard for me to cancel. Given this dynamic, it's difficult to see churn accelerate as NFLX ramps up original spend.

 

I believe more will watch their Amazon content, but for now actual viewership is extremely weak. Perhaps, perception just needs to catch up to reality; there is good content on Prime. However, they also need to smooth out their edges. The last time I was on there, they were promoting a pilot for Jean Claude Van something on the front page. How is that a good decision? Why aren't they promoting something that can actually be binged? In addition, their UI needs fundamental improvements to catch up to NFLX. There are benefits to having a narrow focus.

 

Maybe at some point we reach a tipping point, when consumers realize what Amazon has to offer. But for now, I don't think it matters. NFLX is increasing their originals at such a fast rate that it exceeds our ability to view it all.

 

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We currently watch both Amazon and Netflix.

 

I'd cancel Netflix, but wife is against it.

 

I don't think I've seen any Netflix original that was worth it. But I think that's the same with Amazon originals too. I might be forgetting something that was good though. And my taste is definitely not mainstream.

 

My biggest concern with Netflix is that they gonna spend themselves into financial trouble. However, I don't really know what residuals they keep and what the residual library is worth. So I don't think I have deep insight into how this gonna work out.

 

IMO Netflix is much more sticky internationally than US-side at this point.

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I don't think I've seen any Netflix original that was worth it. But I think that's the same with Amazon originals too. I might be forgetting something that was good though. And my taste is definitely not mainstream.

 

Two of my fave recent shows have actually been Amazon originals: 'Sneaky Pete' and 'Patriot'. Have you seen those?

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From a different perspective, for some parents, the children and kids programming are important. 

 

But with both companies pursuing original programming, and sourcing from multiple places, it's hard to say what's good*.

 

*Good in terms of educational and instructional, like Daniel Tiger or Wild Kratts.  Diversions are good too, like Justice League, I enjoyed them as a youngster, but as a parent, I avoid them.

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I don't think I've seen any Netflix original that was worth it. But I think that's the same with Amazon originals too. I might be forgetting something that was good though. And my taste is definitely not mainstream.

 

Two of my fave recent shows have actually been Amazon originals: 'Sneaky Pete' and 'Patriot'. Have you seen those?

 

I like 'Sneaky Pete' but haven't watched "Patriot'.

 

From the valuation perspective, I just don't see how Netflix can spend their way to keep the 'growth' and justify the current price.

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I don't think I've seen any Netflix original that was worth it. But I think that's the same with Amazon originals too. I might be forgetting something that was good though. And my taste is definitely not mainstream.

 

Two of my fave recent shows have actually been Amazon originals: 'Sneaky Pete' and 'Patriot'. Have you seen those?

 

I like 'Sneaky Pete' but haven't watched "Patriot'.

 

From the valuation perspective, I just don't see how Netflix can spend their way to keep the 'growth' and justify the current price.

 

I also loved Sneaky Pete, but haven't yet watched Patriot.  I love both Netflix and Amazon, but what worries me is that as my kids get older they don't seem to watch anything but YouTube.  I've asked them about it and they say that their friends are the same. (11th-12th grades) . I can see them not bothering with cable or netflix when they are out of the house as unnecessary expenses.  And if they decided to subscribe to anything YouTube Red would be first.  Also even when they are out of the house what is to stop my kids from continuing to use my password on the rare occasion they do want to watch Netflix?  I think the demographic trends may be against NFLX.  I've owned the stock in the past, but no longer do.

 

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I think conventional cable is in big trouble, as younger folks develop totally different view habits.

We ditched our cable a while ago and hardly anyone noticed since everyone is already mostly watching streaming services anyways. I cancelled Netflix as well and watch Prime. I found  plenty on Prime to watch, once we are through, I will turn on Netflix again.

 

I think churn will probably increase across the board for pretty much everything.

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I don't think I've seen any Netflix original that was worth it. But I think that's the same with Amazon originals too. I might be forgetting something that was good though. And my taste is definitely not mainstream.

 

Two of my fave recent shows have actually been Amazon originals: 'Sneaky Pete' and 'Patriot'. Have you seen those?

 

Thanks for suggestions, but not my cup of tea.

 

OT. We are currently on "Inspector Lewis" 8th season on Amazon (but not Amazon original). And on 18th season of "Midsommer Murders" (I believe on Netflix). We enjoy watching British depopulate their islands. This is the true meaning of "Brexit".  8)

 

Edit on topic: We still subscribe to Netflix DVD service. In fact, although clearly neglected by Netflix - the number of old DVDs "not available" continues to balloon - this is clearly a very sticky cash cow (oh no, another OUTR!  ;D ). Just watched "Hidden Figures" on Blu Ray. Great movie.

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Edit on topic: We still subscribe to Netflix DVD service. In fact, although clearly neglected by Netflix - the number of old DVDs "not available" continues to balloon - this is clearly a very sticky cash cow (oh no, another OUTR!  ;D ). Just watched "Hidden Figures" on Blu Ray. Great movie.

 

I thought I was the only one who still got DVDs in the mail.  I first joined netflix in 2003 and have been getting DVDs the entire time.  The only changes I've made to the DVD plan is switching from DVD Discs to Blu-ray and downgrading from 3 discs at a time down to 1 at a time.  And sometimes that 1 disc sits around the house for months before we watch it.  We just watched "Snowden" on Blu-ray.  Highly recommended.

 

 

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I also loved Sneaky Pete, but haven't yet watched Patriot.  I love both Netflix and Amazon, but what worries me is that as my kids get older they don't seem to watch anything but YouTube.  I've asked them about it and they say that their friends are the same. (11th-12th grades) . I can see them not bothering with cable or netflix when they are out of the house as unnecessary expenses.  And if they decided to subscribe to anything YouTube Red would be first.  Also even when they are out of the house what is to stop my kids from continuing to use my password on the rare occasion they do want to watch Netflix?  I think the demographic trends may be against NFLX.  I've owned the stock in the past, but no longer do.

 

Good point about youtube, which seems to have become the default for my kids as well. I think that the services that proves to be the most 'convenient' will win, which seems to be Amazon (because you already have prime) and google/youtube (because you are there everyday).

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The short argument is that the streaming content development costs are really a recurring expense? If they have to keep investing the same amount in new content while revenue stayed flat net income would pretty quickly go negative.

 

Surprised they aren't being taxed in more foreign jurisdictions. In Australia Netflix (and the internet in general) have been wreaking havoc on the traditional broadcast industry and the associated broadcast taxes. I assume this is happening elsewhere but have only researched Australia (looked at their broadcasters).

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The short argument is that the streaming content development costs are really a recurring expense? If they have to keep investing the same amount in new content while revenue stayed flat net income would pretty quickly go negative.

 

They have to keep developing new content to differentiate and keep their subscribers. Besides that, I think that the 'convenience factor' goes against NFLX as well -- Amazon and google/youtube are just too convenient (one less account to remember and manage, etc.)

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I really like Sling & would consider all these guys (Netflix, Amazon, etc.) to be super convenient.

 

I'll go months with very little TV time & have found shutting down services to be dead simple (no hiding behind multiple clicks.)

 

Sling gets my money more consistently (HGTV, Bloomberg, Comedy Central, El Ray & plenty of sports channels)

 

Just checked & they've put El Rey in one of the $5 bundles since my last hook up with them (I really like El Rey & it used to be included in the basic $20 service.)

 

The way they squeeze an extra fiver out of you for extended channels seems smart.

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I'm tempted to short it :)

 

Hope you didn't end up shorting it:

 

#BREAKING: Netflix $NFLX Q2 Net Subscriber Additions (Domestic), 1.07M vs. 600,000 guidance

 

and 5.2M global net adds vs. 3.2M guidance. Growth is accelerating

 

I understand why some of you cancel your membership here and there or don't subscribe at all, but are you the exception or the norm? I think most think of the membership fee this way: it's the cost of a few cups of coffee each month.

 

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I'm tempted to short it :)

 

Hope you didn't end up shorting it:

 

#BREAKING: Netflix $NFLX Q2 Net Subscriber Additions (Domestic), 1.07M vs. 600,000 guidance

 

Any thoughts on what percent of those additions were for one month? I know I renewed my subscription end of May to watch House of Cards and a few other things they added in the May - June period and have since canceled. Surprised Netflix hasn't offered a reduced rate for yearly subscribers to encourage longer term subscription.

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