Research archive for NFLX

I saw an article suggesting that Netflix lose $6 billion per annum on password sharing. It was based on the premise that streaming services lose $25 billion a year on password sharing and Netflix owns 25% of the market. You may even find that because Netflix is more desirable, they lose more.

Sticking to today's theme of streaming giants doing amazing things in 2020, Nielsen published a report titled Tops of 2020: Nielsen Streaming Unwrapped. It is a cool report on what people were binge-watching the most last year.

On Tuesday Netflix reported fourth quarter numbers which smashed expectations. When talking about Netflix and expectations we are talking about subscriber numbers. Unlike free sites like Facebook, Netflix subscribers are paying monthly premiums for the content. Subscriber growth is key for their financial success.

Your favourite streaming giant Netflix, released its quarterly earnings with subscriber numbers growing, but showing signs of cooling down (as expected) after enjoying the massive lockdown surge in earlier parts of the year. The other noteworthy announcement from the company was that Ted Sarandos, Netflix's content boss has been promoted to co-CEO, a natural progression for him.

In economics, you are taught that for any product/service, there is a vast range of prices that consumers are willing to pay. Take bread for example, which retails for around R20 a loaf. There are people who would be willing to pay R40 for a loaf, and there are some people who won't pay more than R10 for a loaf. The goal of marketers is to try create mechanisms where a company can sell their products at many different price points, without having a case where those who are willing to pay a premium end up paying a discount. Unfortunately, for most companies they are forced to pick one price point.

Do you remember M-Net Open Time? I can't remember if it ran everyday between 18:00 and 19:00 or only on weekends? I clearly remember it on Sundays though. We would watch whatever the free to air content was, where the bulk of the adverts during that hour were focused on the amazing movie at 20:00. Then at 19:00 Carte Blanch would start and they would run through the line up of what lay ahead for their action-packed show.

I'm a fan of the weekly "Lunch with the FT" feature, where a senior journalist from the Financial Times has lunch with an interesting person. In this one, the FT's global media editor, Alex Barker, interviews Netflix CEO Reed Hastings.

I was chatting to a client earlier this year who was concerned about buying Netflix shares, because they seemed to have too much competition. My reply to her was that Netflix was the prime mover in an industry that was booming, creating space for lots of successful operators. Growth in streaming video is exploding, particularly since the pandemic began. Take a look at the chart below, which is from Axios.

On Thursday night last week, after the bell, Netflix reported their second quarter numbers. Before I go into the numbers lets remember that Netflix is a business that has benefited from economies around the world going into lockdown. The share price has reflected that. When the rest of the market was collapsing, the NFLX share price barely budged. So far this year the share price is up 51%.

Netflix reported its first quarter earnings, showing a record jump in global paid subscriber additions of 15.77 million. The company was only expecting 8.2 million. This massive surge in new subscriptions was due to people staying at home and seeking entertainment as the coronavirus was starting to disrupt daily life around the planet.

Netflix issued its results after the closing bell in New York last night. At this time of year (aka. our summer) that's only at 11pm. I was sitting up in my pyjamas, struggling to stay awake, anxious that I would only get a few hours of sleep before having to jump out of bed for my group run at 5am through Hillbrow and the Noord Street taxi rank.

It is always nice owning a stock that pops after a set of good results. On Wednesday night after their third quarter numbers, the Netflix share price jumped up by around 10%. The results were mixed but profits came in at $665 million for the quarter, higher than the $470 million estimated by Wall Street.

A long standing and very good client of ours wrote to me yesterday, asking "Is it time to sell Netflix?" My answer was no! I'm also a Netflix shareholder, and I'm buying at current levels.

Netflix is a stock that 95 Vestact clients own in new York. On Wednesday after-market, Netflix released second-quarter numbers saying that overall subscriber numbers came in well below what the company projected and that for the first time in eight years, US subscriber numbers dropped. Not good! The last time subscriber numbers dropped in the US, the company was splitting into DVD mail-order system and a streaming platform!

When you create good shows or movies they become brands on their own. Look at how Disney has leveraged off its characters to make theme parks, games, toys and many other products. Did you know that Disney makes 34% of its revenues from Parks and Resorts alone? That is over $20bn a year. They also make $4.6bn of their revenues from Consumer Products and Interactive Media. That equates to profits of $1.6bn.