41 ms·

Netflix is now worth more than $100B

351 points by LearnerHerzog 9y ago

ebbv 9y ago
Can we infer from this that at the end of Q3 they had ~25 million subscribers? I am not planning to cancel Netflix but I am frustrated at how terrible most of the content is, and how hard it is to find anything with the current interface. I hope they're rethinking their UX and reconsidering their current approach of "License a bunch of really cheap awful content to make it seem like there's a lot of stuff to watch."
- ioquatix 9y ago
  The thing that bothers me is how long it takes for content to come to Netflix. For example, in NZ, I still don't have access to season 2 of The Expanse. Remind me again why I'm paying monthly for this service!?
  - Spivak 9y ago
    That's a decision you need to answer for yourself. Netflix right now is their original content, their semi-origional content, lead generation for other streaming services, and titles you might reasonably find 50 copies of in the bargain bin of your local Best Buy.
  - Fnoord 9y ago
    That's gonna differ per region and series I guess. I am getting the new Good Place episode every friday. Meanwhile, my Sonarr + NZBGet (+ ...) setup downloads it as well and serves it via Emby. But the Netflix app on Android TV is ace ('cept the suggestions aren't always great) whereas Emby would require using the Chromecast.
  - e40 9y ago
    The Expanse is not their content, so it will always take longer to get to Netflix (if it ever shows up). Amazon had a teaser for The Expanse, and season 1 was free. I ended up buying season 2, because I couldn't find good subtitles for the torrent I downloaded. I did this with Mr Robot, too. I can't hear as well as I used to and subtitles are really important to me.
    - vitorgrs 9y ago
      In some markets, it's considered original content. Just like Designated Survivor, Riverdale it's considered original content too (in some countries, it may not be. Here in Brazil Riverdale it's exclusive to Warner Channel for example, and it will just go to Netflix when it ends on Warner I guess). Here all (almost all?) BBC series go to Netflix as "original content". When it ends on BBC, then they release as original on Netflix.
  - rhino369 9y ago
    To be fair, you are paying what? 11 dollars? Netflix isn't meant to be "all access to everything." If you wanted access to everything immediately it's going to cost a lot of money. For a while, it was "access to nearly all old TV." a few years ago. But that was when old TV had little value. Nobody was paying for old TV and you couldn't even find it elsewhere. Now, Netflix has made old TV valuable and has made new TV less valuable. Shows like The Expanse need to monetize on the reruns because the "first run" isn't enough anymore.
    - scarface74 9y ago
      First run hasn't been enough for years before Netflix. Most shows lose money during their original run and made it back via syndication. Most shows on TV are sold by the production companies at a loss or the production company and network or owned by the same parent company. That's part of the reason that people are asking what will happen to the Fox Network after Disney buys the rest of Fox. That also explains why relatively low rated scripted shows can survive on the CW - Warner owns half of CW and all of DC.
- 1123581321 9y ago
  Netflix is focused on original content. Their interface is designed to emphasize it as well as licensed movies and TV they think you’ll like. If your home screen is like mine, they barely have room to recommend licensed B-content anymore. It’s not my favorite way to display information, but they manage to display enough interesting material I haven’t seen yet to get me to choose one. Anything beyond that isn’t actually beneficial to me and I suspect I’d be in a minority of users if I refused to watch a good show in my recommended items because I didn’t see 30 recommended good shows.
  - vitorgrs 9y ago
    Yeah, it's more like a marketing/sales recommendation, and I guess it works for general people.
- bearcobra 9y ago
  They had ~110 million subscribers as of Q3 2017 http://files.shareholder.com/downloads/NFLX/4303980673x0x959841/8E7F87AB-2E5C-41DB-862B-E872EF39B039/Q3_17_Shareholder_Letter_COMBINED.pdf http://files.shareholder.com/downloads/NFLX/4303980673x0x959...
- jimbokun 9y ago
  If you don't care about their original content, you should probably drop the service. No secret that is the direction they are heading.
- Rotareti 9y ago
  > I am frustrated at how terrible most of the content is, and how hard it is to find anything with the current interface. I use criticker.com to solve this problem. They have an "On Netflix" filter, that lists everything available on Netflix. They also have a rating system, where you can give movies a rating from 0 to 100. If you rate enough titles, it'll give you a "Probable Score" for each movie/series/documentary, that you haven't rated. I rated about 150 titles and their suggestions are quite accurate already. I can now sort the list of titles that is available on Netflix based on that "Probable Score" and work my way down from 100. Their interface is a little confusing and buggy at times, but it's really powerful (IMO). The database is quite complete, it contains stuff throughout the entire cinema history from multiple countries; series and documentaries as well.
  - smogcutter 9y ago
    Amazing you need a third party service now to replicate what netflix was all about in the DVD era.
  - Consultant32452 9y ago
    I use the JustWatch app on my phone. You can tell it which services you subscribe too (it has many). You can even let it tell you where content is purchase-able.
- psergeant 9y ago
  117m apparently http://www.bbc.com/news/business-42779953 http://www.bbc.com/news/business-42779953
amelius 9y ago
My only fear: soon there will be no BitTorrent seeders left.
- Spivak 9y ago
  It's really a boom and bust. As Netflix's 3rd party library continue to be siphoned off more people will turn to piracy because they're not going to subscribe to n different services.
  - evilantnie 9y ago
    It's possible, but they're still cheaper than HBO Now, Showtime Now, etc. I found myself spending more time in Netflix watching their exclusively produced content than from their 3rd party library over the last year. As long as they can keep producing quality content to add to their library, I think they're in good shape.
  - dvt 9y ago
    N different services still come out cheaper than cable. I pay for Netflix, Hulu, and Amazon Prime (which comes with Video) so let's say ~ $30 a month. Compared to Cox Cable, it's not even close -- $30 is Cox' entry level cable offering (and I can't share it with my family, nor watch shows at my own leisure). My bet is that there's plenty of cash still left. Until cable companies wise up (which is probably never), Netflix, Hulu and Amazon Video will continue printing money. Edit: almost forgot that with cable you still get ads lol.
    - mschuster91 9y ago
      > N different services still come out cheaper than cable. For the US which is used to pay triple digit sums a month for basic TV yes, but for Europeans? No way. For Germans, for example, it's the (mandatory) public-broadcast fee of 18€/month/household and maybe 20-30€ if you really really want pay TV (add another 30-40€ for the premium sports but these can be streamed all over the net). So basically the delta between public TV only (which covers private channels, too! Lots of stations here are OTA) and pay-TV is Netflix+Spotify+maaaybe one additional service, that's it.
kosei 9y ago
Wonder why Q4 had such a big bump but Q1 2018 seems to be dropping back down to prior levels. Is this just people purchasing subscriptions at the holiday? Discounts? Special content?
- yeukhon 9y ago
  Netflix doesn’t have discount for holidays. They recently up the subscription price. My bet is the increase has to do with the holiday effect (more time at home), and the fact more collections are added. A good number of recent movies are available online (Amazon, YouTube, Netflix) as soon as they leave the box. Though the mote interesting graph would be views. During major sport events I can bet there is a big dip. The family subscription is a bargain though.
  - 33W 9y ago
    It could be people receiving netflix capable devices (smart TV, appleTV, etc) and deciding that the cost is now worth it.
  - jedberg 9y ago
    > Though the mote interesting graph would be views. During major sport events I can bet there is a big dip. I was looking in my archive but I can't find the graphs right now. Yeah, during big sporting events, there is a flattening of viewing. But what is really fascinating is that if you dig in, you find that it only affected devices that were typically connected to TVs. So streaming was normal on portable devices like iPads and Phones and the 3DS, but down on the big TVs. However, the biggest dip of all happens during the Oscar telecast, second only to the Golden Globes. :) New Year's eve was pretty flat too, but again only on the big TV devices (kid's devices were unaffected).
    - yeukhon 9y ago
      Wow! Really really interesting indeed. Love to hear this from someone who ran SRE there. Thank you for sharing!!!
- 9y ago
ourmandave 9y ago
$100B?! That's like Dogecoin X 50 back in the day.* (* which is to say last week.)
- oh_sigh 9y ago
  Difference being that there is actual depth in the books for nflx vs doge
  - jusonchan 9y ago
    My guess is that he was being sarcastic about cryptos.
- donquichotte 9y ago
  I thought just the same thing. Bubbles all around.
nimos 9y ago
Surprised Netflix hasn't branched out into more content types or more dynamic content. You now have this two way communication channel seems kind of boring to not try and use it even just for mostly video content. Some of their shows run 7+ million an episode. If you look at the development costs of simple mobile games and cut out all the stuff related to IAP it seems like they could create a lot of value for customers for pretty cheap by making some simple popular games without the IAP BS.
- dasil003 9y ago
  Are more people going to subscribe to Netflix because of this? Will they be distracted from the core business? Building a streaming video service is very different from building games of any sort, do they want to dilute their talent by going out and hiring for this? Sorry but I just don't see how this in any makes sense other than, "hey Netflix is doing really well, why don't they pull a Google and start throwing spaghetti at the wall".
  - nimos 9y ago
    Do they ever actually hire people directly to make any of their content? I assumed it was all contracted out to production companies, I know it is for some shows. They could do the same thing for games just acting like a distributor. I think it's more likely to keep people subscribed then generate new subscriptions. No one person is going to like all the content they make. Personally I'd really enjoy having some fun well made mobile games I knew wouldn't try to sucker me at every turn with IAP. I think people with kids would really appreciate this. Their competitive advantage is they don't have to worry about IAP or marketing. I don't think this really falls into the category of "throwing spaghetti at the wall." It's creating entertainment content for a fixed monthly cost. Different entertainment, sure, but it's no self driving car.
    - dasil003 9y ago
      How do they distribute the games?
anilshanbhag 9y ago
The entire stock market feels like its in a bubble. Netflix stock gained more than 25% in the past one month. Their free cash flow (FCF) has been negative every single quarter and will be for many quarters to come. Stocks trade based on discounted cash flow(DCF). Netflix however produces no material return for investors and still majority of the analysts keep putting higher and higher price targets, its like they are collectively pushing a hidden agenda. It's as if there is this new way of valuing companies that is not based on DCF.
- spyspy 9y ago
  > Netflix however produces no material return for investors Speak for yourself. My brokerage account looks much greener since I bought it.
- icedchai 9y ago
  Buy high, sell higher. Some stocks trade purely on growth and momentum.
- samfisher83 9y ago
  I don't know why you are being downvoted. At some point you have to generate cash to justify your valuation. However if you look at amazon they have never generated cash relative to their valuation and its been like 20 something years. It has returned 10x in the last 10 years so I don't think their investors are complaining. If you look at google, facebook, and apple they are generating cash that would justify their valuations.
  - paulcole 9y ago
    > if you look at amazon they have never generated cash relative Isn't this one of those big Amazon myths? I thought the truth was that the income has always been there but it's the constant reinvestment that has kept profits low?
    - appleiigs 9y ago
      That's how people justify investing in Amazon. But I don't know how they think Amazon can just stop reinvesting one day and make money. Every business line Amazon has is hyper competitive. Can Amazon actually raise prices in any of their businesses?
TeMPOraL 9y ago
Please, sell half of it; we could have a Mars and Moon base at the same time for that money...
joering2 9y ago
How do they make money?? I mean - seriously? And how will they stand up now that NN is gone and any company/website using much more traffic will be force to pay more? Please help me with the math -- at any given day, me, my wife and 2 kids are streaming netflix on multiple devices in HD; most likely pulling tens of gigabytes of data per day. How is that all covered under $10.99 per month?? and on the top - they make solid profit?? HOW??
- jonknee 9y ago
  They stage their content directly with ISPs which it makes it cheaper and faster for everyone. https://media.netflix.com/en/company-blog/how-netflix-works-with-isps-around-the-globe-to-deliver-a-great-viewing-experience https://media.netflix.com/en/company-blog/how-netflix-works-...
- spyspy 9y ago
  CDNs will reduce bandwidth costs per user to essentially nothing. Content creation is the lion's share of their costs.
  - joering2 9y ago
    Biggest CDN charge $9 per 1TB of transfer... how is watching 20TB per month worth less than netflix fee so that they actually make some profit?
    - jtmcmc 9y ago
      at the scale netflix transfers data they pay much much less than this. They also do direct peering and will put boxes in your ISP datacenter - https://openconnect.netflix.com/en/ https://openconnect.netflix.com/en/
      - joering2 9y ago
        Im sorry it still doesnt make sense to me. "buy 1 tone of fish pay $10 per kg", "buy 10,000 tone of fish, pay 1 cent". Doesnt make sense!! At some point more is not that much cheaper. I doubt coming back to my CDN asking for price on 1,000 TB would bring price to 1 cent per TB.
nkrode 9y ago
Wanna see what a full blown network effect looks like, kidos — check out Netflix earnings. More Subscribers ⤵️ More Revenue ⤵️ More $$ for Original Content and Licensing ⤵️ More bids won against networks ⤵️ More content on Netflix ⤵️ More Subscribers
- brucephillips 9y ago
  Strictly speaking, these are scale economies, not network effects.
  - nkrode 9y ago
    That is orthogonal to the network effect you see at play here, not contradictory
    - brucephillips 9y ago
      Network effects occur when usage increases the value of the product, as with Google or Facebook. With Netflix, usage does not increase value. It instead creates more revenue, enabling Netflix to invest in fixed costs, creating scale economies. To illustrate, if Netflix were boundlessly funded in their early days, they could create a product that's just as valuable as it is today, even though they had no customers, and therefore no network effects. The one caveat is that friends talking about shows with each other does create real network effects, but not what you're describing here. Cheers
      - mrexroad 9y ago
        Could also view it as... more usage == more data == more value
rajacombinator 9y ago
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.
- Spooky23 9y ago
  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.
  - brucephillips 9y ago
    What interface do you want?
    - mortehu 9y ago
      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.
  - jusonchan 9y ago
    What exactly are you looking for?
    - Spooky23 9y ago
      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.
deleted 9y ago
[deleted]
edpichler 9y ago
I study stock market for more than a decade, for long term, and I perfectly now that company data should not be analysed in a isolatedly, but, any stock with P/E ratio 230.24 you need to be very careful, and put just the money you can afford to lose without disturb your sleep. For whom that does not understand company ratios, a P/E ratio 230.24 is meaning that you need 230 years of profits to return to you the price you are paying today, of course, this does not consider that the company and profits will grow. But to have a parallel, at least in my country, really good companies have a P/E between 20 and 30, on average, and 30 is considered very high.
- brown9-2 9y ago
  If netflix doesn’t pay a dividend, does a P/E analysis still make any sense?
  - brucephillips 9y ago
    Yes. Any public company must ultimately pay a dividend to be valuable. Edit: All of my responders are ignoring my use of "ultimately". A company can certainly invest in growth, but growth only matters if the company eventually returns money to shareholders, and the only way to do that is a dividend.
    - edpichler 9y ago
      No, as I explained up here. It can use the money to grow.
      - plaguuuuuu 9y ago
        if there's no expectation of dividends ever being paid, the share price should be 0
    - edpichler 9y ago
      Also, some companies pay dividends, and after make loans to the bank (paying interests), to do investments.
bluthru 9y ago
Netflix is going to tank if Disney makes their stuff (including Fox) exclusive to hulu or a new service.
- yorby 9y ago
  Disney is pulling/will pull out a lot of stuff from Netflix[1] and will also start its own streaming service[2]... and Netflix' catalog had already shrunk a lot before that news[3]. 1.https://www.cnbc.com/2017/08/08/disney-will-pull-its-movies-from-netflix-and-start-its-own-streaming-services.html https://www.cnbc.com/2017/08/08/disney-will-pull-its-movies-... 2. https://www.nbcnews.com/pop-culture/tv/disney-start-own-streaming-services-remove-content-netflix-n791001 https://www.nbcnews.com/pop-culture/tv/disney-start-own-stre... 3. http://www.businessinsider.com/netflix-catalog-size-shrinks-2016-9 http://www.businessinsider.com/netflix-catalog-size-shrinks-...
  - bluthru 9y ago
    Thanks for doing the heavy lifting!
  - scarface74 9y ago
    Not all of their stuff. The Marvel originals will stay with Netflix.
chrisper 9y ago
These days I prefer Amazon video content. It's also significantly cheaper. 5 bucks instead of 20. Then you add the fact that their Android app is bad and that not even Netflix Originals are available globally, Netflix doesn't seem to be that great.
- puranjay 9y ago
  My biggest problem with Netflix is discovery. I don't want to watch a new show because I don't want to commit myself to 50 episodes. And I don't even know if I'll like the show. I just want to channel surf, like on TV. Just let me press a button and let me go through a bunch of videos so I can decide which one I like by watching it
rado 9y ago
And still uses gibberish, machine-translated subtitles. (Bulgarian)
cs702 9y ago
The price-to-earnings ratio is now 230, meaning that if an acquirer were to buy the company for cash at its current market capitalization, absent any growth in earnings, it would take the acquirer 230 years to earn the money back, all else remaining the same. However, the 230-year figure might be optimistic, because Netflix's cash flow from operations, before capital expenditures, has been negative for the past three years, largely due to fast-growing spending on content. Operations burned almost $1.8 billion last year. It could take longer than 230 years. In theory, Netflix could stop aggressively investing in content any time now, and it would become more profitable. In theory, they could find other ways to monetize the content at some unspecified time in the future, to generate additional profits. In theory. In reality, it remains to be seen if they can and will do those things at some point in the future, and whether doing them will justify today's market capitalization. It is, how shall I say this, questionable whether Netflix will be able to generate sufficient cash flow in the future to justify today's market capitalization. That said, I love the service and think the management team has done an amazing job building it, so I hope and wish they can pull it off, for the sake of their current investors, who must be relying on similar hopes and wishes. BTW, Netflix is far from the most optimistically valued company today in terms of current earnings. Amazon's price-to-earnings multiple is currently 335, and Salesforce's is 14,796. These are not particularly unusual examples in today's stock market. There quite a few companies trading at high-double, triple, quadruple, and quintuple multiples of earnings. In other words, there are currently many companies whose earnings-payback period, for a would-be cash acquirer, all else remaining the same, is in the many decades, centuries, millennia, or even greater. It makes no sense to me. Source for all figures: https://finance.google.com https://finance.google.com
niwde 9y ago
There's a bubble. A bubble of desperation. You can't put your money in the bank due to the low interest rates. Traditional businesses are not doing well. Investors are desperate to put their money to work. So we see bubbles in tech, bubbles in cryptocurrencies, bubbles in startups. Best to watch what the legendary investors are doing. People like Warren Buffett, Prem Watsa, and the likes.
- batmansmk 9y ago
  Netflix generates $8B revenue with 3k staff, when Time Warner generates $28B with 25k staff. Both net income are equivalent ($3B). Both valuations are equivalent (100B). Dividends are equivalent. I don't see any bubble. Given the right amount of capital and assets, Netflix sounds like way more capable of growing than Time Warner in the next 5 years. Time will tell.
deleted 9y ago
[deleted]

351 points by LearnerHerzog 9y ago

ebbv 9y ago

Can we infer from this that at the end of Q3 they had ~25 million subscribers? I am not planning to cancel Netflix but I am frustrated at how terrible most of the content is, and how hard it is to find anything with the current interface. I hope they're rethinking their UX and reconsidering their current approach of "License a bunch of really cheap awful content to make it seem like there's a lot of stuff to watch."

ioquatix 9y ago
The thing that bothers me is how long it takes for content to come to Netflix. For example, in NZ, I still don't have access to season 2 of The Expanse. Remind me again why I'm paying monthly for this service!?
- Spivak 9y ago
  That's a decision you need to answer for yourself. Netflix right now is their original content, their semi-origional content, lead generation for other streaming services, and titles you might reasonably find 50 copies of in the bargain bin of your local Best Buy.
- Fnoord 9y ago
  That's gonna differ per region and series I guess. I am getting the new Good Place episode every friday. Meanwhile, my Sonarr + NZBGet (+ ...) setup downloads it as well and serves it via Emby. But the Netflix app on Android TV is ace ('cept the suggestions aren't always great) whereas Emby would require using the Chromecast.
- e40 9y ago
  The Expanse is not their content, so it will always take longer to get to Netflix (if it ever shows up). Amazon had a teaser for The Expanse, and season 1 was free. I ended up buying season 2, because I couldn't find good subtitles for the torrent I downloaded. I did this with Mr Robot, too. I can't hear as well as I used to and subtitles are really important to me.
  - vitorgrs 9y ago
    In some markets, it's considered original content. Just like Designated Survivor, Riverdale it's considered original content too (in some countries, it may not be. Here in Brazil Riverdale it's exclusive to Warner Channel for example, and it will just go to Netflix when it ends on Warner I guess). Here all (almost all?) BBC series go to Netflix as "original content". When it ends on BBC, then they release as original on Netflix.
- rhino369 9y ago
  To be fair, you are paying what? 11 dollars? Netflix isn't meant to be "all access to everything." If you wanted access to everything immediately it's going to cost a lot of money. For a while, it was "access to nearly all old TV." a few years ago. But that was when old TV had little value. Nobody was paying for old TV and you couldn't even find it elsewhere. Now, Netflix has made old TV valuable and has made new TV less valuable. Shows like The Expanse need to monetize on the reruns because the "first run" isn't enough anymore.
  - scarface74 9y ago
    First run hasn't been enough for years before Netflix. Most shows lose money during their original run and made it back via syndication. Most shows on TV are sold by the production companies at a loss or the production company and network or owned by the same parent company. That's part of the reason that people are asking what will happen to the Fox Network after Disney buys the rest of Fox. That also explains why relatively low rated scripted shows can survive on the CW - Warner owns half of CW and all of DC.
1123581321 9y ago
Netflix is focused on original content. Their interface is designed to emphasize it as well as licensed movies and TV they think you’ll like. If your home screen is like mine, they barely have room to recommend licensed B-content anymore. It’s not my favorite way to display information, but they manage to display enough interesting material I haven’t seen yet to get me to choose one. Anything beyond that isn’t actually beneficial to me and I suspect I’d be in a minority of users if I refused to watch a good show in my recommended items because I didn’t see 30 recommended good shows.
- vitorgrs 9y ago
  Yeah, it's more like a marketing/sales recommendation, and I guess it works for general people.
bearcobra 9y ago
They had ~110 million subscribers as of Q3 2017 http://files.shareholder.com/downloads/NFLX/4303980673x0x959841/8E7F87AB-2E5C-41DB-862B-E872EF39B039/Q3_17_Shareholder_Letter_COMBINED.pdf http://files.shareholder.com/downloads/NFLX/4303980673x0x959...
jimbokun 9y ago
If you don't care about their original content, you should probably drop the service. No secret that is the direction they are heading.
Rotareti 9y ago
> I am frustrated at how terrible most of the content is, and how hard it is to find anything with the current interface. I use criticker.com to solve this problem. They have an "On Netflix" filter, that lists everything available on Netflix. They also have a rating system, where you can give movies a rating from 0 to 100. If you rate enough titles, it'll give you a "Probable Score" for each movie/series/documentary, that you haven't rated. I rated about 150 titles and their suggestions are quite accurate already. I can now sort the list of titles that is available on Netflix based on that "Probable Score" and work my way down from 100. Their interface is a little confusing and buggy at times, but it's really powerful (IMO). The database is quite complete, it contains stuff throughout the entire cinema history from multiple countries; series and documentaries as well.
- smogcutter 9y ago
  Amazing you need a third party service now to replicate what netflix was all about in the DVD era.
- Consultant32452 9y ago
  I use the JustWatch app on my phone. You can tell it which services you subscribe too (it has many). You can even let it tell you where content is purchase-able.
psergeant 9y ago
117m apparently http://www.bbc.com/news/business-42779953 http://www.bbc.com/news/business-42779953

amelius 9y ago

My only fear: soon there will be no BitTorrent seeders left.

Spivak 9y ago
It's really a boom and bust. As Netflix's 3rd party library continue to be siphoned off more people will turn to piracy because they're not going to subscribe to n different services.
- evilantnie 9y ago
  It's possible, but they're still cheaper than HBO Now, Showtime Now, etc. I found myself spending more time in Netflix watching their exclusively produced content than from their 3rd party library over the last year. As long as they can keep producing quality content to add to their library, I think they're in good shape.
- dvt 9y ago
  N different services still come out cheaper than cable. I pay for Netflix, Hulu, and Amazon Prime (which comes with Video) so let's say ~ $30 a month. Compared to Cox Cable, it's not even close -- $30 is Cox' entry level cable offering (and I can't share it with my family, nor watch shows at my own leisure). My bet is that there's plenty of cash still left. Until cable companies wise up (which is probably never), Netflix, Hulu and Amazon Video will continue printing money. Edit: almost forgot that with cable you still get ads lol.
  - mschuster91 9y ago
    > N different services still come out cheaper than cable. For the US which is used to pay triple digit sums a month for basic TV yes, but for Europeans? No way. For Germans, for example, it's the (mandatory) public-broadcast fee of 18€/month/household and maybe 20-30€ if you really really want pay TV (add another 30-40€ for the premium sports but these can be streamed all over the net). So basically the delta between public TV only (which covers private channels, too! Lots of stations here are OTA) and pay-TV is Netflix+Spotify+maaaybe one additional service, that's it.

kosei 9y ago

Wonder why Q4 had such a big bump but Q1 2018 seems to be dropping back down to prior levels. Is this just people purchasing subscriptions at the holiday? Discounts? Special content?

yeukhon 9y ago
Netflix doesn’t have discount for holidays. They recently up the subscription price. My bet is the increase has to do with the holiday effect (more time at home), and the fact more collections are added. A good number of recent movies are available online (Amazon, YouTube, Netflix) as soon as they leave the box. Though the mote interesting graph would be views. During major sport events I can bet there is a big dip. The family subscription is a bargain though.
- 33W 9y ago
  It could be people receiving netflix capable devices (smart TV, appleTV, etc) and deciding that the cost is now worth it.
- jedberg 9y ago
  > Though the mote interesting graph would be views. During major sport events I can bet there is a big dip. I was looking in my archive but I can't find the graphs right now. Yeah, during big sporting events, there is a flattening of viewing. But what is really fascinating is that if you dig in, you find that it only affected devices that were typically connected to TVs. So streaming was normal on portable devices like iPads and Phones and the 3DS, but down on the big TVs. However, the biggest dip of all happens during the Oscar telecast, second only to the Golden Globes. :) New Year's eve was pretty flat too, but again only on the big TV devices (kid's devices were unaffected).
  - yeukhon 9y ago
    Wow! Really really interesting indeed. Love to hear this from someone who ran SRE there. Thank you for sharing!!!
9y ago

ourmandave 9y ago

$100B?! That's like Dogecoin X 50 back in the day.* (* which is to say last week.)

oh_sigh 9y ago
Difference being that there is actual depth in the books for nflx vs doge
- jusonchan 9y ago
  My guess is that he was being sarcastic about cryptos.
donquichotte 9y ago
I thought just the same thing. Bubbles all around.

nimos 9y ago

Surprised Netflix hasn't branched out into more content types or more dynamic content. You now have this two way communication channel seems kind of boring to not try and use it even just for mostly video content. Some of their shows run 7+ million an episode. If you look at the development costs of simple mobile games and cut out all the stuff related to IAP it seems like they could create a lot of value for customers for pretty cheap by making some simple popular games without the IAP BS.

dasil003 9y ago
Are more people going to subscribe to Netflix because of this? Will they be distracted from the core business? Building a streaming video service is very different from building games of any sort, do they want to dilute their talent by going out and hiring for this? Sorry but I just don't see how this in any makes sense other than, "hey Netflix is doing really well, why don't they pull a Google and start throwing spaghetti at the wall".
- nimos 9y ago
  Do they ever actually hire people directly to make any of their content? I assumed it was all contracted out to production companies, I know it is for some shows. They could do the same thing for games just acting like a distributor. I think it's more likely to keep people subscribed then generate new subscriptions. No one person is going to like all the content they make. Personally I'd really enjoy having some fun well made mobile games I knew wouldn't try to sucker me at every turn with IAP. I think people with kids would really appreciate this. Their competitive advantage is they don't have to worry about IAP or marketing. I don't think this really falls into the category of "throwing spaghetti at the wall." It's creating entertainment content for a fixed monthly cost. Different entertainment, sure, but it's no self driving car.
  - dasil003 9y ago
    How do they distribute the games?

anilshanbhag 9y ago

The entire stock market feels like its in a bubble. Netflix stock gained more than 25% in the past one month. Their free cash flow (FCF) has been negative every single quarter and will be for many quarters to come. Stocks trade based on discounted cash flow(DCF). Netflix however produces no material return for investors and still majority of the analysts keep putting higher and higher price targets, its like they are collectively pushing a hidden agenda. It's as if there is this new way of valuing companies that is not based on DCF.

spyspy 9y ago
> Netflix however produces no material return for investors Speak for yourself. My brokerage account looks much greener since I bought it.
icedchai 9y ago
Buy high, sell higher. Some stocks trade purely on growth and momentum.
samfisher83 9y ago
I don't know why you are being downvoted. At some point you have to generate cash to justify your valuation. However if you look at amazon they have never generated cash relative to their valuation and its been like 20 something years. It has returned 10x in the last 10 years so I don't think their investors are complaining. If you look at google, facebook, and apple they are generating cash that would justify their valuations.
- paulcole 9y ago
  > if you look at amazon they have never generated cash relative Isn't this one of those big Amazon myths? I thought the truth was that the income has always been there but it's the constant reinvestment that has kept profits low?
  - appleiigs 9y ago
    That's how people justify investing in Amazon. But I don't know how they think Amazon can just stop reinvesting one day and make money. Every business line Amazon has is hyper competitive. Can Amazon actually raise prices in any of their businesses?

TeMPOraL 9y ago

Please, sell half of it; we could have a Mars and Moon base at the same time for that money...

joering2 9y ago

How do they make money?? I mean - seriously? And how will they stand up now that NN is gone and any company/website using much more traffic will be force to pay more? Please help me with the math -- at any given day, me, my wife and 2 kids are streaming netflix on multiple devices in HD; most likely pulling tens of gigabytes of data per day. How is that all covered under $10.99 per month?? and on the top - they make solid profit?? HOW??

jonknee 9y ago
They stage their content directly with ISPs which it makes it cheaper and faster for everyone. https://media.netflix.com/en/company-blog/how-netflix-works-with-isps-around-the-globe-to-deliver-a-great-viewing-experience https://media.netflix.com/en/company-blog/how-netflix-works-...
spyspy 9y ago
CDNs will reduce bandwidth costs per user to essentially nothing. Content creation is the lion's share of their costs.
- joering2 9y ago
  Biggest CDN charge $9 per 1TB of transfer... how is watching 20TB per month worth less than netflix fee so that they actually make some profit?
  - jtmcmc 9y ago
    at the scale netflix transfers data they pay much much less than this. They also do direct peering and will put boxes in your ISP datacenter - https://openconnect.netflix.com/en/ https://openconnect.netflix.com/en/
    - joering2 9y ago
      Im sorry it still doesnt make sense to me. "buy 1 tone of fish pay $10 per kg", "buy 10,000 tone of fish, pay 1 cent". Doesnt make sense!! At some point more is not that much cheaper. I doubt coming back to my CDN asking for price on 1,000 TB would bring price to 1 cent per TB.

nkrode 9y ago

Wanna see what a full blown network effect looks like, kidos — check out Netflix earnings. More Subscribers ⤵️ More Revenue ⤵️ More $$ for Original Content and Licensing ⤵️ More bids won against networks ⤵️ More content on Netflix ⤵️ More Subscribers

brucephillips 9y ago
Strictly speaking, these are scale economies, not network effects.
- nkrode 9y ago
  That is orthogonal to the network effect you see at play here, not contradictory
  - brucephillips 9y ago
    Network effects occur when usage increases the value of the product, as with Google or Facebook. With Netflix, usage does not increase value. It instead creates more revenue, enabling Netflix to invest in fixed costs, creating scale economies. To illustrate, if Netflix were boundlessly funded in their early days, they could create a product that's just as valuable as it is today, even though they had no customers, and therefore no network effects. The one caveat is that friends talking about shows with each other does create real network effects, but not what you're describing here. Cheers
    - mrexroad 9y ago
      Could also view it as... more usage == more data == more value

rajacombinator 9y ago

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.

Spooky23 9y ago
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.
- brucephillips 9y ago
  What interface do you want?
  - mortehu 9y ago
    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.
- jusonchan 9y ago
  What exactly are you looking for?
  - Spooky23 9y ago
    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.

deleted 9y ago

[deleted]

edpichler 9y ago

I study stock market for more than a decade, for long term, and I perfectly now that company data should not be analysed in a isolatedly, but, any stock with P/E ratio 230.24 you need to be very careful, and put just the money you can afford to lose without disturb your sleep. For whom that does not understand company ratios, a P/E ratio 230.24 is meaning that you need 230 years of profits to return to you the price you are paying today, of course, this does not consider that the company and profits will grow. But to have a parallel, at least in my country, really good companies have a P/E between 20 and 30, on average, and 30 is considered very high.

brown9-2 9y ago
If netflix doesn’t pay a dividend, does a P/E analysis still make any sense?
- brucephillips 9y ago
  Yes. Any public company must ultimately pay a dividend to be valuable. Edit: All of my responders are ignoring my use of "ultimately". A company can certainly invest in growth, but growth only matters if the company eventually returns money to shareholders, and the only way to do that is a dividend.
  - edpichler 9y ago
    No, as I explained up here. It can use the money to grow.
    - plaguuuuuu 9y ago
      if there's no expectation of dividends ever being paid, the share price should be 0
  - edpichler 9y ago
    Also, some companies pay dividends, and after make loans to the bank (paying interests), to do investments.

bluthru 9y ago

Netflix is going to tank if Disney makes their stuff (including Fox) exclusive to hulu or a new service.

yorby 9y ago
Disney is pulling/will pull out a lot of stuff from Netflix[1] and will also start its own streaming service[2]... and Netflix' catalog had already shrunk a lot before that news[3]. 1.https://www.cnbc.com/2017/08/08/disney-will-pull-its-movies-from-netflix-and-start-its-own-streaming-services.html https://www.cnbc.com/2017/08/08/disney-will-pull-its-movies-... 2. https://www.nbcnews.com/pop-culture/tv/disney-start-own-streaming-services-remove-content-netflix-n791001 https://www.nbcnews.com/pop-culture/tv/disney-start-own-stre... 3. http://www.businessinsider.com/netflix-catalog-size-shrinks-2016-9 http://www.businessinsider.com/netflix-catalog-size-shrinks-...
- bluthru 9y ago
  Thanks for doing the heavy lifting!
- scarface74 9y ago
  Not all of their stuff. The Marvel originals will stay with Netflix.

chrisper 9y ago

These days I prefer Amazon video content. It's also significantly cheaper. 5 bucks instead of 20. Then you add the fact that their Android app is bad and that not even Netflix Originals are available globally, Netflix doesn't seem to be that great.

puranjay 9y ago
My biggest problem with Netflix is discovery. I don't want to watch a new show because I don't want to commit myself to 50 episodes. And I don't even know if I'll like the show. I just want to channel surf, like on TV. Just let me press a button and let me go through a bunch of videos so I can decide which one I like by watching it

rado 9y ago

And still uses gibberish, machine-translated subtitles. (Bulgarian)

cs702 9y ago

The price-to-earnings ratio is now 230, meaning that if an acquirer were to buy the company for cash at its current market capitalization, absent any growth in earnings, it would take the acquirer 230 years to earn the money back, all else remaining the same. However, the 230-year figure might be optimistic, because Netflix's cash flow from operations, before capital expenditures, has been negative for the past three years, largely due to fast-growing spending on content. Operations burned almost $1.8 billion last year. It could take longer than 230 years. In theory, Netflix could stop aggressively investing in content any time now, and it would become more profitable. In theory, they could find other ways to monetize the content at some unspecified time in the future, to generate additional profits. In theory. In reality, it remains to be seen if they can and will do those things at some point in the future, and whether doing them will justify today's market capitalization. It is, how shall I say this, questionable whether Netflix will be able to generate sufficient cash flow in the future to justify today's market capitalization. That said, I love the service and think the management team has done an amazing job building it, so I hope and wish they can pull it off, for the sake of their current investors, who must be relying on similar hopes and wishes. BTW, Netflix is far from the most optimistically valued company today in terms of current earnings. Amazon's price-to-earnings multiple is currently 335, and Salesforce's is 14,796. These are not particularly unusual examples in today's stock market. There quite a few companies trading at high-double, triple, quadruple, and quintuple multiples of earnings. In other words, there are currently many companies whose earnings-payback period, for a would-be cash acquirer, all else remaining the same, is in the many decades, centuries, millennia, or even greater. It makes no sense to me. Source for all figures: https://finance.google.com https://finance.google.com

niwde 9y ago

There's a bubble. A bubble of desperation. You can't put your money in the bank due to the low interest rates. Traditional businesses are not doing well. Investors are desperate to put their money to work. So we see bubbles in tech, bubbles in cryptocurrencies, bubbles in startups. Best to watch what the legendary investors are doing. People like Warren Buffett, Prem Watsa, and the likes.

batmansmk 9y ago
Netflix generates $8B revenue with 3k staff, when Time Warner generates $28B with 25k staff. Both net income are equivalent ($3B). Both valuations are equivalent (100B). Dividends are equivalent. I don't see any bubble. Given the right amount of capital and assets, Netflix sounds like way more capable of growing than Time Warner in the next 5 years. Time will tell.

deleted 9y ago

[deleted]