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Netflix shares decline after reporting disappointing subscriber growth
- throwaway0255 8y agoWith Netflix, there doesn’t seem to be any amount of seeing something and not clicking on it that ever gets the system to stop showing it to me. Every time I log in, there’s a big wall of 20 posters I’ve seen a thousand times and never clicked on once and have zero interest in. And the whole user experience seems about finding my way around that wall. I can find stuff I’m interested in, but the platform never surfaces it for me. I always have to dig. I always use the feedback system, too. Netflix always brags about paying mid-six in pure salary and hiring top of market. Their internal presentations on content discovery and demography are something people tell stories of like they glimpsed a magical relic or something. As a user I honestly cannot fathom where all that money and research could possibly be going. Maybe my account is broken or something.
- zmmmmm 8y agoHeh ... same here. I'm baffled after all their supposed AI with competitions and all, it actually sends me emails pitching me to watch shows that I already watched end-to-end and finished. I couldn't think of a clearer or simpler signal to an algorithm than "they already watched it" but apparently Netflix isn't able to pull that off.
- firasd 8y agoHere in India, Netflix costs ₹500/mo. Amazon Prime costs ₹999 for the whole year. Both are much pricier compared to regular cable TV, which gives you hundreds of channels for a few hundred rupees per month. So there's a saturation point to at least some of their international expansion unless incomes start rising more broadly... Also, anecdotally, I only have so much time for 'prestige' TV. They cover Delhi and Youtube in ads everytime they have something to announce--Altered Carbon, which I watched, but then they had Lost in Space, Wild Wild Country, and now a show set in Mumbai called "Sacred Games"--while it's great for subscribers to have a wealth of new material to watch all the time, there may be an inflection point beyond which producing/acquiring more content doesn't grow their audience...
- Pxtl 8y agoSurprising how the ratio is so far reversed in India. Here in Canada (which is a similar market to the USA), Netflix is the cheapest option. Cable TV is several times more expensive for even a basic plan, and Amazon Prime costs about the same as Netflix (but includes the other Prime services).
- dukes_haven 8y agoNetflix would be cheaper in India too but you have to take into account that not everyone can speak English there
- jrochkind1 8y ago??
- Sebguer 8y agoNot only does this statement not make any clear sense (why does English speaking #s affect price of the service?) but India has the second largest English speaking population in the world.
- gruez 8y ago>but India has the second largest English speaking population in the world. irrelevant when that equates to 10% of the population.
- Sebguer 8y agoCan you explain why it's irrelevant? It's unclear to me how market size is impacted by the fact that there is a larger pool of people that aren't in the market.
- wolco 8y agoThat is probably the most insightful comment here. Who realizes india would have the second most. If Indian had the same income levels as the west the English market alone could challenge the US.
- deleted 8y ago[deleted]
- simonxia 8y agochinese market should be considered :)
- matte_black 8y agoShit, this is really going to hurt my portfolio. A lot of other tech stocks are down as well.
- zwily 8y agoDid you just buy it yesterday? It’s still way up for the last few months.
- matte_black 8y agoI actually bought it quite sometime ago, but that means I have a lot of shares, and the more shares you have the more small movements in price start to add up to real money. Right now I’m down several thousands of dollars on NFLX, which could have easily been a few international vacations. It’s not the first time or last time stuff like this happens, but everything was rallying so nicely the past few days it’s a shame to see that get back tracked. And of course, other tech stocks are down with it which also adds to the pain.
- jetsnoc 8y agoYou can't predict the market but I think they still have some growth ahead of them and that their shares will still rise. They won't rally and grow as much as they have forever but I don't think the market has softened up for them yet. I'm going to buy while they are a little down.
- matte_black 8y agoI do think they will grow but now I’m planning when my actual exit will be. I think I’ll give it another year or two before pulling out and realizing the gains.
- blt 8y agoThanks for letting us know
- volgo 8y agoAlternative headline: "Netflix stock plunges to only +24% in 90 days"
- hn_throwaway_99 8y agoSeriously, the stock plunged to where it was all of about 8 weeks ago.
- scurvy 8y agoSucks if you bought in this morning hoping for a big earnings surprise. (I didn't, but I know those that did)
- robomc 8y ago"Sucks if you bet on black" - buying shares hoping for an earnings surprise to pocket some free gains is the middle class version of having a good feeling about a horse.
- scurvy 8y agoWell, they're not free gains. It's also not any different than buying on any other day from an investing standpoint. Risk is still the amount of margin requirement (excluding derivative hedges).
- throwawaymath 8y agoOpening a position on the day of the earnings announcement is generally a bad idea regardless of whether you’re right or wrong about the direction. Volatility is effectively priced in at that point.
- hueving 8y agoYou're thinking of options, not stock. Stock price itself can't imply volatility, it can only reflect market expectations of earnings.
- wgerard 8y agoTotal anecdote: Kinda sucks when shows leave Netflix and don't get replaced; half the appeal of Netflix is the ability to quickly switch between Futurama and Always Sunny, and more importantly to be able to watch those shows on a platform that doesn't completely suck (FX's app has got to be one of the worst apps I've ever used). When "Parts Unknown" was about to leave Netflix, I really questioned whether it was worth keeping my subscription. It feels like it's happening at an accelerated pace in the last couple of years. The original content is good, and I realize that those shows leaving Netflix is probably more about Fox/CNN than it is about Netflix, but still makes me less interested in Netflix nonetheless.
- TylerE 8y agoThey've been so aggressively getting rid of "real" content and replacing it with their in-house productions, the quality of which has slid quite a bit as they've ramped up volume. I'm on the verge of canceling it, since most of what I want is on Prime anyway.
- brightball 8y agoSame. I nearly cancelled when they got rid of Chuck. Amazon Prime picked it up shortly afterwards and lately most of what we watch is on Amazon.
- zuppy 8y agoWell, I’ve got the opposite reaction with Amazon: I can’t watch even some of their own shows when they get released in US. For example The Man in the High Castle’s second season whas unavailable here for quite a while after the release. You can’t blame the content producers here.
- xienze 8y agoI don’t think they’re replacing their content on purpose, they have no choice. Around ten years ago when Netflix streaming started to take off studios thought they were taking Netflix for a ride, selling new-fangled “streaming” rights for old catalogue films that otherwise weren’t making much money. Now the game has changed and Netflix effectively can’t afford to renew these contracts, so little by little the stuff people actually know and love is leaving the service. To Netflix’s credit, they started trying to make their own content, but for every hit there’s about twenty misses. And frankly, even if everything they made turned to gold they still wouldn’t have age-old classics that everyone still wants to see. I actually think they’re going to be in a lot of trouble a few years down the line as their catalog is going to be a handful of great originals, tons of garbage originals, and a bottomless pit of Z-grade studio films.
- axaxs 8y agoNetflix is in a weird position. Early on I loved it, but over time it seems down to a few good originals and a lot of bad ones, and third rate third party content. I haven't cancelled yet but probably will, as I rarely use it. I don't blame Netflix for this necessarily, but it has made it's consumer value much weaker. Internationally, there are much cheaper options typically. As an aside, their taking of a political stance has led to a small but visible American chunk leaving, or at least claiming to.
- stingraycharles 8y agoYes, I’ve also noticed that generally their original content isn’t very great. I can see how this happens when you optimize for binge-watching, but it feels like they just throw a lot of stuff against the wall and see what sticks. I’ve recently got an HBO subscription and the difference in quality is staggering.
- shakestheclown 8y agoI don't like how they mark exclusive right properties as "Originals" when they may not have made them. A lot of the quality of those exclusives is not great compared to their actual originals.
- thisisit 8y agoNowadays every media company wants their own streaming service. That means Netflix has to scramble for content. And when starting out they were careful in selecting projects. But once they got a taste for success they have been green-lighting projects left and right. But, they are not going to select winners every time. Stuff like Bright, the Will Smith movie, relied solely on the star power. It will be interesting to see if Netflix imposes some kind quality bar to ensure things don't go even worse.
- TeMPOraL 8y ago> Nowadays every media company wants their own streaming service. I wonder how this will evolve. Short-term, it looks like self-destructing greed to me. People are not going to subscribe to shit ton of services because each of them has a small slice of movies they might want to watch.
- cncrnd 8y agoI hardly ever watched TV, but found myself binge watching Netflix. The on-demand model is so much cleaner than regular TV where you have advertisements being shown for almost 1/3 of the time. In fact, I liked Netflix so much that I cancelled it because it was becoming a distraction. If I have kids they definitely will not have access to any such thing, and I feel sorry for the kids growing up with it today.
- willio58 8y agoI get where you’re coming from but self control is an important thing to teach children. If your version of self control is fully disconnecting, I understand that but it doesn’t mean you should feel sorry for kids that have access to Netflix. (Speaking as a 21 year old who spent a number of years of my childhood watching Netflix with my family)
- cncrnd 8y agoI'm also in my early 20's. I think children are by nature more impulsive, and if they have access to Netflix at a young age without enough parental restrictions they might start down a bad path. When they're older it's easier to contain. That's part of the reason for age restrictions on drugs/alcohol. Some drugs aren't all that different from dopamine inducing digital stimuli. The prefrontal cortex, which is responsible for self control, isn't fully developed until age 25.
- krageon 8y agoThe age restrictions on drugs (alcohol is also a drug) are because of researched and profound effects on developing brains. It has very little to do with undeveloped self-control (although that is definitely a thing). The difference in effects on dopamine between drugs and anything that isn't a drug is also profound, mainly because drugs will make things happen that simply cannot happen normally. I don't at all agree with your "children should not be exposed to things they might want" premise, but that is a discussion for another day.
- foepys 8y agoWhen Disney will launch their streaming service in late 2019, Netflix will be in deep trouble. If Disney is allowed to aquire Fox, they will have such a massive (and exclusive) catalogue, that Netflix will simply be too expensive. Netflix Originals are not too bad but also not exceedingly good and I personally wouldn't pay 11€/mo for them.
- fullshark 8y agoI'm betting Disney messes it up. They will be too married to legacy revenue streams in DVD + Cable TV to really make their service worthwhile and eat into Netflix's market share with an incredible deal for consumers.
- kalleboo 8y agoThey're also too obsessed with control and exclusivity. See their practice of "vaulting" movies so they can re-release them every 10 years. It's basically the opposite market strategy of streaming services that live on the long tail. https://en.wikipedia.org/wiki/Disney_Vault https://en.wikipedia.org/wiki/Disney_Vault
- orky56 8y agoThey will have the technology side covered [1] but they have to nail the pricing/catalogue/UI mix to succeed. However Disney has the resources (time/$/talent) to go at it until they take down Netflix. [1]: https://www.theverge.com/2017/8/9/16118694/disney-bamtech-espn-streaming-netflix https://www.theverge.com/2017/8/9/16118694/disney-bamtech-es...
- heavenlyblue 8y agoIt’s not 90s anymore. Technology is a commodity. If they are smart enough anout it they’ve got all the chances to beat Netflix by that time.
- scarface74 8y agoThat’s what HBO thought. Their streaming service was a streaming pile of crap technologically. They ended up using BAMTech to redo it. Disney bought BAMTech.
- Chazprime 8y agoIt seems as if Netflix is focusing on quantity instead of quality lately...their original content isn’t as compelling as it used to be.
- wavefunction 8y agoSacred Games and Secret City (among others) are far more well-done than most other recent offerings from other providers imnsho. Hulu has The Handmaid's Tale and HBO has Westworld but that's about it.
- Reedx 8y agoHBO also has Game of Thrones, Silicon Valley, John Oliver, good documentaries from time to time...
- wolco 8y agoHBO is double the price and once you get through the best 15 series content is thin. Netflix has so much variety coming out daily.
- jandrese 8y agoHBO Now is so weird. I subscribed for a couple of months to watch Game of Thrones and Westworld. I figured I might as well check out the rest of the service too. HBO has many decades of original content right? There should be tons of stuff to watch on there, but I could find barely anything. It was just a light crust of the most current shows, whatever movies they were currently licensing, and a few crumbs from the back catalog. I ended up dropping the subscription because I'd watched everything interesting on the service in no time flat. I could have been watching Tales from the Crypt for months, but it wasn't available at all. Where is the Rey Bradbury theater? Shows I'd heard about growing up but only got to see briefly in a hotel room on a trip. For a service nearly twice as expensive as Netflix they made seemingly no effort to keep me engaged.
- Reedx 8y ago
- sebringj 8y agoWhat happened is streaming tech isn't niche to Netflix anymore. It became good enough for HBO and Showtime etc etc of course Amazon so now you have a plethora of stuff to watch and Netflix isn't the only game in town but they will always be the original innovator. I hope they can innovate more and do something fantastic.
- cheeze 8y agoGame is only going to get tighter too. Now you have sports moving into the streaming era, Disney launching something soon, etc. The time of even more fragmented streaming offerings (and more selection) is soon. Comcast is an interesting study here too. They are pushing ip based linear TV hard right now. I don't like the company, but they seem to know what they are doing.
- floatingatoll 8y agoWhat's the lower bound for their share price before they have to change how they operate the business or suffer a penalty to net revenue? Or, if the stock market goes offline for 365 days, would any particular harm come to them at all?
- saym 8y agoI believe their net revenue was still +40%. I think a slowing in subscriber growth could prove to be temporary. In general, they'd have to lose shareholder/board confidence in company direction, which won't happen anytime soon.
- warent 8y agoMy girlfriend and I use Netflix to watch Star Trek, Chinese movies, and Indian/Bollywood films. That's it. Honestly the UX has been steadily getting better from my perspective and the film selection now is way beyond where it was ~3 years ago. Maybe I'm an outlier? It didn't occur to me that it might be an unpopular opinion to say that Netflix is actually good
- wolco 8y agoI'm trying out HBO/Movie network. Once you get through 15 mostly goid series the content gets very thin. For half the price netflix has more original and unique content and provides more value at half the codt. I like the variety I wish the UI promoted it a little better
- aslkdjaslkdj1 8y agoHBO has a much better movie selection than Netflix.
- voltagex_ 8y agoIn the US.
- TeMPOraL 8y agoBut did you notice Star Trek movies suddenly disappearing? Check back the movies and series you've watched and meant to watch again at some point. Chances are, you won't find them anymore. That's the thing with Netflix - objectively, it's the best streaming service available. The complaints are mostly relative to what they could be, and about the direction in which they evolve.
- deleted 8y ago[deleted]
- pasbesoin 8y agoI'm finding significantly more to watch on (U.S.) Prime than Netflix streaming, these days. Even Netflix' premium original content is getting monotonous. Where it -- or, more broadly, "Netflix" branded content -- is not simply getting stuffed full of "quantity over quality". I've been feeling like I should have pulled the plug, a while back. And yes, per other comments here, someone needs to... "have a talk with" their UI people. Not helpful, recent changes.
- wesleytodd 8y agoLol, down to 340. It was ~200 in January. So it is only up 60% this year.
- keithnz 8y agoI don't know if anyone else does this, but I subscribe to netflix for a while, then I hit a wall of "nothing to watch" and new content that I'm interested in dribbles out too slowly. So I unsubscribe and subscribe with a different streaming service, and watch their content for a bit, then go to another, and then eventually come back to netflix. If it's been long enough I also get free trials for another month also :)
- keyle 8y agoYeah I keep opening Netflix nowadays and I click around for a while and have not much interesting to watch. There is a lot of STUFF, but it's not worth my time.
- madrox 8y agoYou've basically described the streaming business these days. Listening to talks from Netflix, they optimize for this kind of behavior. While they're interested in retention, they have a pretty optimized winback funnel.
- whoisjuan 8y agoThere's a large percentage of users who won't go through all that trouble just to find new content. Anecdotally I can tell you that there's a large percentage of users who can re-watch the same series over and over (I'm one of those people). Netflix knows this so that's why they go great lengths to keep series like The Office and Friends, btw, both owned by Comcast...so you can guess why Netflix is cheering for Comcast to win that Fox bid...
- trophycase 8y agoMaybe because they keep adding stuff like autoplay trailers, intro skips, and outro skips. Just play the damn TV show, stop trying to manipulate me into watching more, just play it as made.
- odnarupoque 8y agoOne thing no one notices is DRM and lack of content on Netflix overseas... It is nearly impossible to have Netflix on Chinese Android devices (thanks to Widevine), which is a huge loss due to rapidly growing smart projector market... who needs 480p on a 150'' screen?? As for lack of content: my family is trilingual, and we constantly moving between countries. It's almost impossible to get content we like outside of US (even Australia sucks), these unbelievably stupid and shortsighted ideas of distribution regions (for DVD/BD) and DRM (for streaming) keeps me on torrents for 20+ years already, and I see no end to this ordeal. I tried to "go legal" on so many occasions, and EVERY SINGLE TIME I stumble upon some ludicrous "new tech" that prevents me as a consumer to watch content I like. When will the studios realize that ALL content is out there already? And literally NONE of their effort since DVD css stopped anyone from "stealing" anything. I can get any movie/show from torrents in max quality, but I would like to just pay $15 to someone and stream FullHD/4K content in any language to any device, and finally stop pirating stuff. Too much to ask, Netflix? Music industry learned this lesson hard way 10 years ago, unleashed unlimited HQ streaming, and now look -- music piracy is nearly extinct, and both listeners and industry are happy. In the meantime, I'm filling my 4TB hdd with BD remuxes and enjoying 4k videos w/o paying any cent to anyone. No other way around it for consumer, it seems.
- redthrowaway 8y agoI'm curious about their decision to push original content as hard as they have. In some cases, like comedy specials, it's a clear win. But their original dramas are really hit or miss, and for every Altered Carbon you have a half dozen utterly forgettable shows. It makes the "Netflix Original" badge pretty meaningless as an indicator of quality, so I still have to wait for a buzz to develop to commit to trying a show. I don't end up watching Netflix nearly as much as I'd like to. Also, the diminishment of the back catalogue (and the fact that so much of it is SD--not their fault) is negating one of their biggest selling points.
- jogjayr 8y ago> for every Altered Carbon you have a half dozen utterly forgettable shows That's no different from regular TV. We were spoiled in the early years of Netflix streaming because they could cherry-pick license all the good stuff from earlier for cheap. Now they have to go on the same "fund a bunch of stuff, discover some hits" journey that all the other content producers have gone through. On the plus side you can watch anything you want on demand, there are no ads, and the website and apps are fast. And you don't have to pay $100/month for a cable bundle with shitty customer service. If there's some show or movie I'm really missing, my local public library does a great job of filling that need.
- voltagex_ 8y agoHas Netflix dropped the bitrate on 1080p versions of shows? I don't remember it looking this bad.
- dunpeal 8y agoAn interesting question for me is whether Netflix will also experience a wave of talent departures as an additional result of this stock plunge. Netflix is competing for talent as a FAANG outfit, and as such much of the value they provide to their employees depends on their RSUs. This works great as long as stock price is on a steep rise, as has generally been the case for FAANG over the past several years. Now that the price is on a downslope, though, we should expect their compensation package to be less competitive than other tech companies, and especially FAANG. Will they be able to deal with it somehow? Or will their top talent migrate to more successful tech companies that can pay as well as Netflix did while its stock was rising?
- jogjayr 8y agoNetflix doesn't force employees to take RSUs. Every employee has the option to take anywhere from 0-100% of their compensation in cash. [1] This was also my experience. 1. https://www.quora.com/How-does-Netflix-compensate-its-employees https://www.quora.com/How-does-Netflix-compensate-its-employ...
- dunpeal 8y agoIt's nice that employees have a choice, but presumably some of them did choose to take stock (it would be pretty bad if none of them did), and they will see a reduction in their comp as a result of this plunge. Furthermore, the link you provided also states that since 2015, there's a compensation factor that is non-voluntary and pegged to the price of the stock, so everyone will see a reduction, though some more than others.
- icebraining 8y agoAs others have pointed out, even with this plunge the stock is still up 24% in the last 90 days alone.
- 1123581321 8y agoFactor into your calculation that the stock is now cheaper for new hires, and that Netflix can adjust compensation to retain employees. I personally don’t think it’s an interesting question yet.
- calvinbhai 8y agoI think the growth stall in this quarter is the lull before the storm. Netflix has enough India specific content in the pipeline, and only one of these “made by Netflix” series has been released yet. If there is one thing Netflix does good, it is the focus on content that is relevant to the region, without compromising on the language and characters. Another recent thing in India, is the plunging broadband prices in India, especially wireless (4G LTE, 2 GB per day, for 89 days costs less than $10 <head explode?>). Netflix, Amazon Prime and other streaming video options are going to get more signups soon, especially from the younger population that may not have a TV at home, but will certainly have a smartphone and/or a laptop. For them, Netflix is certainly a cheaper option, especially if you divide monthly cost of the top tier plan ₹800 by 4 = ₹200 which is certainly bang for the buck compared to cable tv, that you can watch only at home. The only disadvantage for Netflix is for those who prioritize watching sports, which is still a major reason for people to subscribe for cable. Until the recent price war on 4G/LTE/5G pricing (in early 2018) that has led to dirt cheap wireless internet access, I thought Netflix in India was a wrong move. With such cheap internet access, Netflix and other streaming video platforms certainly have a huge growth phase from the next quarter onwards. Watch out for Netflix growth numbers over the next few quarters in India. I'm extremely bullish of Netflix in India and I'll be shocked if Netflix fails to grow from here onwards.
- dmode 8y agoI think the market overreacted a bit. They have been growing for so many years, there is bound to be a quarter here and there where growth stalls. Having said that, I feel Netflix's biggest problem is content discovery. They have the best multilingual content that can be consumed globally like Narcos and Sacred Games. Yet they make it really hard to find such content. Their categorization is weird and not easily understandable. But what really bothers me is that their content preview is just a short paragraph. So you are asking viewer to watch 10hrs of content based on a short paragraph ? I would prefer a lot more info about a particular show before I commit to it. Info such as critics reviews, rotten tomato and IMDB rating, popularity in native country, more detailed description of the show, similar shows, etc etc. Basically I have to go ask r/television about a particular series or movie on Netflix before I start watching. I am pretty sure this leads to a lot of user frustration and ultimately cancellation
- stingraycharles 8y agoThe market reacted because it’s priced for perfection. Any bump in the road will cause a reaction. Its PE was at 300 which is pretty insane.
- calvinbhai 8y agoThat is so true! Netflix has so many Indian language movies, and yet it is so difficult to search content just by the language or sub-region (South Indian)