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Netflix Expects To Be Unprofitable In 2012
PolygamousRanchKid writes with an article in CNN Money about Netflix's prospects in 2012. From the article: "Netflix warned in its last earnings report that it expects to be unprofitable 'for a few quarters' starting at the beginning of 2012. The primary culprit is Netflix's pricey plan to expand its streaming video service into the United Kingdom and Ireland, but a wave of subscribers jumping ship hasn't helped. The filing also revealed that Netflix is in the process of raising $400 million from investors to help bulk up its cash stash. While that will give Netflix more money to invest in content, secondary offerings are sometimes considered ominous signs."
Anytime I ran any kind of "rational valuation" calculation on NFLX based on subscribers, income, potential for growth, etc. the market seemed to be out-pricing my ideas by a factor of 3 to 7... NFLX has been a very expensive stock for a very long time, I'm surprised it took this long for the bubble to deflate.
Still a good business model, when they aren't spouting off idiotic ideas about breaking it.
They lost a lot of subscribers due to their split-service gap, and they look to be having content issues...
However, they still seem in a good position to me. The service is fundamentally good, they still have a lot of ratings from users to help determine what content makes sense for them to buy, and (most importantly) they have a LOT of paths into the home - just about any device you can name supports Netflix.
They are in a rocky spot now but I just can't see who can replace them easily, or even reach the position they currently hold within a year or two.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
They face very stiff competition from other companies with much deeper pockets, so they are going to have it tough for a while. I like Netflix (their latest snafu with splitting the DVD rental / streaming plans didn't affect me - I'm streaming only), and as a technophile, I'm pleased that they have gone to great lengths to support such a diverse range of hardware. A lot of companies wouldn't have bothered with Wii, XBox, Android, etc. Netflix's decision to split off their DVD rental was simply waaaaay too early. That is an inevitability of course - anyone with the least bit of foresight can see that demand for physical media is going to drop off a great deal in the near future. However, Netflix must provide a mechanism to bolster the streaming support since the movies offered online are so hit and miss, and the only choice is DVD for now.
Take Lord of the Rings for example. Did you know that you can watch The Two Towers online, but not the first or third movies? Now what in the world is that about??? As long as that sort of garbage is going on, customers need a single unified interface and billing to get movies in whichever format is available.
Better known as 318230.
Maybe he's a bricklayer. My cousin is one. He works like hell 3 seasons a year, then takes the winter off.
Buddy, I watch netflix for the 2 hours I have to watch a movie between errands, work, and sleep.
It's not a lot to ask, and I'll be damned if I'll have someone with your attitude treating it like I'm doing something wrong.
Fuck you.
-- This space for lease, low setup fee, inquire within!
Actually, its healthy for your kids to be exposed to cold, germs, etc...
Get them outside, go skating at the rink, go tobogganing, cross country skiing, downhill skiing, snowshoeing, sign up for a winter survival course just for fun, build a snowman....
Lots of stuff to do!
No sig here...
Netflix has yet to offer video games or adult movies. Both those avenues will bring in tons of cash.
In NYC, the government has actually created a black market for tobacco, complete with all the crime that comes with it. How did they do it? By making it too expensive to legally acquire tobacco -- same as any other instance of prohibition -- except that this isn't full prohibition, but some kind of quasi-prohibition where it's both legal and illegal.
This is what prohibition does (create a black market), whether you're talking about "sin taxing" or outright criminalization. If you look a little closer, you'll realize that creating a black market -- and all the violence and injustice that comes with it -- is actually more profitable than taxing and regulating. It simply depends on the drug and whether or not they can "pull it off". They tried it with alcohol and actually succeeded for 10 years until the people started waking up to the violence and the root cause of it all.
What they are doing in NYC is testing the waters, not reducing the number of smokers. They are looking for the sweet spot between legalized/regulated (tax revenue) and criminalized/prohibited (law enforcement revenue) that will simply rake the most money through the business of government.
Not quite as romantic as you pictured, is it? Don't think for a second that prohibitionists and "drug warriors" are after anything but cold hard cash, because you're fooling yourself.
Put a bike trainer or treadmill in your garage, and watch Netflix while you exercise. Problems (real and perceived) solved ;-)
www.clarke.ca