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Netflix stock drops more than 10% as earnings show huge decline in new subscribers
- Thread starter BringBackSonics
- Start date
I'd say no but I'm not an expert. Other, smarter people consider it to be overvalued though, and the market is getting much more crowded with new competitors like Disney+ and HBO Max. Netflix isn't in a great position.
Their stock would be about 0 right now if they relied on other companies content.
Their early, bold realization that they had to create their own quality content to get ahead of the streaming wars was a move of sheer genius that cannot be understated how key it was.
Don't buy singular stock unless you've maxed an IRA and 401k contribution, even then you could probably find a better investment
Or max your IRA contribution and buy singular stock. My IRA doubled over the last 3 years thanks to Apple. ;-)
Disclaimer: This isn't actually a good idea. I just got lucky.
Netflix is in a very tight spot. It's starting to reach the point with all these competitors hoarding their content for themselves that their only play will be to double or triple the amount of original content vs today. But to do that they will have to keep raising prices more and more than they already have. With Disney+ undercutting so much (though I'm sure they'll go up over time) and HBO Max launching and whatever else (the rest like apple+ and so on), it's going to become a harder sell for people when they do the content math of should I pay this amount and get these 3 streaming services, or this amount and just get Netflix. The original content would have to be pretty damn glorious.
Considering their most watched shit is the office and friends, and that's the kind of stuff they will have to say goodbye to...not a good look. Not all doom and gloom, they can afford to fail for a long ass time but it's not as cushy a spot as the good ol days. They need to keep on their toes.
Considering their most watched shit is the office and friends, and that's the kind of stuff they will have to say goodbye to...not a good look. Not all doom and gloom, they can afford to fail for a long ass time but it's not as cushy a spot as the good ol days. They need to keep on their toes.
It seems it could be biting them in the ass now though. People subscribe for stuff they've heard of, not unknowns.
Pretty much. I basically use them as a lazy man's Redbox at this point. The other services are going through a revolving door. I think subscription reselling and management services are going to become a pretty cutthroat market.
Lets see
1. Price hike
2. Cancelling a ton of their original shows that people subbed for (all their marvel shows, One Day at a Time, Santa Clarita Diet, Unreakable, Fueller House, Lucifer, etc) and then their big shows that are ending, like Orange is The New Black. They are literally cutting off soooo many shows this year it is absurd, they have cut more original shows this year then any other year, especially when it comes to comedy shows which sucks cause Santa Clarita/Unbreakable were two of my favorites.
I wonder why they didn't gain as many subs...can't put my finger on it.
1. Price hike
2. Cancelling a ton of their original shows that people subbed for (all their marvel shows, One Day at a Time, Santa Clarita Diet, Unreakable, Fueller House, Lucifer, etc) and then their big shows that are ending, like Orange is The New Black. They are literally cutting off soooo many shows this year it is absurd, they have cut more original shows this year then any other year, especially when it comes to comedy shows which sucks cause Santa Clarita/Unbreakable were two of my favorites.
I wonder why they didn't gain as many subs...can't put my finger on it.
OP
OP
Friends and Office being the most viewed on Netflix wasn't surprising.
What was surprising was that 'New Girl' was 4th or 5th highest viewed on Netflix
What was surprising was that 'New Girl' was 4th or 5th highest viewed on Netflix
Well, I'm sure they have data that proves that theory wrong -- it's most likely that people stay subscribed to rerun their favorite shows.
Friends and The Office being the most viewed on Netflix and I'm wrong? Ok.
Allegedly the studios want to kill off physical media to further entice people to watch their small player services as well. It's probably a ways off yet but it's coming. The ugly future..
I agree with pretty much everything you pointed out, but management's thought process is pretty clear. They seem convinced that the only way to generate new subscriptions is to constantly create new content. They think that new seasons of old shows will not bring in new subscribers.
I think it is a terrible methodology, and is made even worse by the the general decline in quality of Netflix's output. Not to mention the biggest problem is that they are producing a fairly large amount of content, but are not really advertising it.
This will just be an issue for most companies going forward, right? Like its a flowed system. Continuous growth isn't possible, especially if your raising prices.
Buying any stock now is a bad idea. Were getting to the end of the longest business cycle in recent history , with a yield curve that's been inverted for over 2 months now, and with the central banks only options, being QE 2.0. Recession is coming. Buy other asset classes.
Yep, and then when that new content doesn't get big numbers they are canning them quicker then ever.
Netflix used to feel like a safe haven for their original shows, even if they were niche or weren't pulling "GoT" numbers you didn't fear them being axed. Now it's the complete opposite, it's almost as bad as Fox was when they had decent shows on there (firefly, etc).
That means that they aren't giving shows time to grow an audience nor are they allowing niche shows a life on their platform. As long as they aren't losing money on a show even if it has a smaller audience they should allow them to grow, that's how you get people to stay on board you give their niche shows a home and make it the only place to see them and support them. A lot of small shows can add up to big subscription bases since no other network serves them.
No. Netflix stock is still super expensive. Even after this bad quarter the stock is still priced in a way where Netflix is expected to retain a high growth rate in subscribers for years to come. Which doesn't seem likely with everyone else pulling their content while starting their own streaming services and competing with Netflix for subscribers
If you want to get stock in a company with a video streaming service. Go with Disney.
What did you mean, then? It's obvious people don't just subscribe to watch the Office -- they subscribe to watch original content and then stay on to keep watching The Office over and over.
Don't you agree with that? That's why that poster was saying that it was a genius move because now that they're losing that content, they won't lose all their subscribers. Obviously, they'll lose some, but I'm sure they have a very thorough retention plan.
My point is -- people won't necessarily subscribe to the new platform only because it has Friends. They'll do that if they have interesting original content and the opportunity to watch Friends over and over again.
Anyway it's just a win / win for us and for content creators.
I didn't understand why people said that there wasn't enough new in Netflix until I found out that shows I watch on Netflix are in other streaming apps in the US
If they want to maintain customers year round maybe do discounted pricing if you commit for longer than a month like a lot of other subscription services do.
I'm expecting them to somehow crack down on account sharing too. Not sure how Maybe put some type of device limit on the base plans to inconvenience people so that people who want more have to pay for the UHD plan to get more devices or something.
Why would they all of a sudden start thinking this now though? People have been doing this with GOT and other HBO shows for YEARS. I know I have. Unless you're not just talking about HBO. Then yeah, added competition is going to make this more and more of thing. That being said it affects other services too. Stuff's become so fragmented that you can't even get all the broadcast networks anymore on Hulu unless you pay for the much pricier LiveTV sub.
I'm expecting them to somehow crack down on account sharing too. Not sure how Maybe put some type of device limit on the base plans to inconvenience people so that people who want more have to pay for the UHD plan to get more devices or something.
Why would they all of a sudden start thinking this now though? People have been doing this with GOT and other HBO shows for YEARS. I know I have. Unless you're not just talking about HBO. Then yeah, added competition is going to make this more and more of thing. That being said it affects other services too. Stuff's become so fragmented that you can't even get all the broadcast networks anymore on Hulu unless you pay for the much pricier LiveTV sub.
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I wouldn't advise investing here. Wall Street tends to punish companies with slowing growth and high valuations. The next month is probably going to see more earnings warnings which will pressure the market, and with Disney+ just 4 months away why buy the stock now?
I'm saying it's the opposite of what's being stated. People sign up for the stuff they've heard of and they want to watch again or even for the first time, but they stay for all the original content too that they didn't know about until they subbed. Not the other way around. Now because the stuff people have heard of is shrinking, they aren't getting as many new subs. It's biting them in the ass now.
Investing is a complete ponzi scheme. These companies are forced to sell people on the idea that infinite growth is possible. Being a publicly traded company means that being profitable is no longer a deal breaker, or even particularly important in many cases.
Netflix is still not available in a lot of countries, including mine. /shrug
netflix is like nintendo, always doomed, even pachter makes cameos with them too. Amazing
In the meantime, they're far and beyond the best streaming service outside the us, and in someplaces the only option. So, as seen in their international growth, they'll be fine
In the meantime, they're far and beyond the best streaming service outside the us, and in someplaces the only option. So, as seen in their international growth, they'll be fine
Honestly I haven't paid for Netflix in months. The only stuff I really like on it would be Bojack, stranger things and arrested development. They're so spaced out that I'm usually unsubscribed long enough to get another free trial like I did with Stranger Things.
That trial just ended today too. Haven't touched it since the 4th anyway.
That trial just ended today too. Haven't touched it since the 4th anyway.
Sorry if anyone else pointed this out but this is actually the second time Netflix has ever contracted. unfortunately for Netflix the first time was expected because it happened when they separated the DVD rental business from Netflix as we know it now. My gut says this one is due to content. Feels like Netflix haven't had any big attention grabbing shows these last few months. So people are not subscribing/cancelling.
Their free cash flow last quarter was negative 594 million dollars and they expect it to be negative 3.5 billion dollars this year.
Santa Clarita's final season was garbage... And my wife and I loved the first two seasons
Netflix's problem is that their original content is all over the goddamn place as far as quality, that and in many cases, waaay too fucking long.
Like, we FINALLY finished Lost in Space and it was terrible. Not just because it's a complete missed opportunity given the material, but also because it's stretched over 10 hours (and it they take the full hour) when it could easily been 4 at most.
Then, they keep making these throwaway ass movies with recognizable names that are shit. Or say their big tent pole release like Defenders, which also sucked AND still felt too long at only 8 episodes. I dunno, I hate binge culture and it definitely feels like their content it designed around the gross culture of people who want to sit on their ass for 3-4 hour stretches..
I'm Soo close to canceling are sub at this point, but waiting to see how The Witcher turns out.
Growth was always going to be from International subscriptions and not US based. There's still a wide market out there world wide that there's plenty of room for growth.
This part has always baffled me how even $10 a month was too expensive.
OP
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This came out a few months ago:
That would be problematic for families. They should probably restrict it to a household IP but then you have the problem with mobile and remote viewing.
Whilst understanding concerns about multiple subs, questions of ownership and price hikes, ultimately I do agree with this
I'm 37 who was a child who used to spend £14.99 on buying one VHS tape. As a value proposition I can spend my adult years paying less than that for hundreds of shows and movies for the month, and I'm still relatively happy with Netflix's output (UK) although I can definitely see a decline
You get more content with these subscriptions than you will ever get with cable, plus yeah its even cheaper.
(It comes to a point that people are trying advertise false lies to help cable companies for free, Jesus christ people.)
What is hyperbole.
Don't ever run a business with an attitude like that.
Their content sucks these days, most interesting shows are getting cancelled left and right so I'm not at all surprised by this.
They need to search for quality and diversity. Those 10+ sci-fi shows and Adam Sandler movies aren't going to cut it.
They need to search for quality and diversity. Those 10+ sci-fi shows and Adam Sandler movies aren't going to cut it.
Yeah, their content is kinda garbage lately. Only a couple shows I am interested in left on my list.
They wasted billions of dollars on securing outside content, which is not gonna disappear. I feel like there is going to be a VERY rough year or two as the big content leaves before Netflix is able to ramp up its original content.
They wasted billions of dollars on securing outside content, which is not gonna disappear. I feel like there is going to be a VERY rough year or two as the big content leaves before Netflix is able to ramp up its original content.
Honestly, they keep increasing the price year after year, but at the same time I see them releasing less and less shows that actually interest me all that much.
They're also missing a true blockbuster show that captures the zeitgeist. In that regard they've got Stranger Things and, well, not much else really.
They're also missing a true blockbuster show that captures the zeitgeist. In that regard they've got Stranger Things and, well, not much else really.
The mix of people accessing Netflix illegally and gleefully admitting it, people happy Netflix might die, people being stans for a Disney Plus and people acting like Netflix didn't do an incredible job changing the game and making video streaming a thing is shocking.
If Netflix dies it is not a good thing. At all.
If Netflix dies it is not a good thing. At all.
The two are obviously related. Expenditures are growing because competition is coming in and they are developing shows at a record pace. Thats the only move they have.
Disney plus looks to be a pretty meager offering, way too family friendly for my taste with anything with edge going to HULU. Lets see how long supporting TWO streaming services is going to work out.