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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."
They need more content...I watched nearly all the good movies over one winter off work.
Qwikster will be profitable. Oh, wait...
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.
Who got upset over their subscriptions going up a tiny amount. If those people wanted to protest something really gouging, it'd be the gas prices. Or the costs of medicine. Or fuck, go out and yell at the government or the banks.
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 had it coming. Oatmeal Netflix parody:
http://theoatmeal.com/comics/netflix
I'm not a lawyer, but I play one on the Internet. Blog
I understood when they had to raise prices. The studios have gotten crazy greedy on the whole streaming thing and their costs have gone through the roof. Netflix streaming is still BY FAR the best deal around. You can watch the entire runs of shows like Battlestar Galactica (original AND new, even 1980), The X-Files, Twin Peaks, Firefly, Family Guy, etc (many of them in HD, no less). Nothing else even comes close to the selection or quality of Netflix's streaming library.
But I'm a lot LESS sympathetic with some of their bonehead moves--like trying to separate their by-mail/streaming divisions with annoying separate websites and queues (a move destined to serve little purpose other than pissing off loyal customers like me) and paying $40 million for a bunch of shitty Dreamworks streaming rights (a move that's only going to encourage the greed of the other studios in the future).
SJW: Someone who has run out of real oppression, and has to fake it.
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.
Here we go again. Netflix (streaming) is going to follow the same path as Tivo. Innovate at the beginning, then get to a point where you have trouble growing your audience. Then bigger companies, such as the cable companies, come in with a comparable product, and eat your lunch, because they already have a relationship with the customer, and deeper pockets than you which will help them bid up content license prices. This makes the streaming side of NFLX negative growth in the middle term, as they have the same problem in other countries, despite their efforts to expand.
The disk mailing side of the company is already saturated from a customer base side. Increasing postal rates and the eventual end to saturday delivery will make the service less viable. Eventually the postal service will go to every-other-day delivery of first-class mail, in order to reduce the number of carriers and mail trucks by 30 to 40 percent. The disk mailing side of NFLX is therefore a revenue stock now (with that revenue being eatten by the streaming side), and negative growth in the future. Sell...
While I agree people in the US should in general exercise more, I do not think you can regulate people's lives with a tax increase. People getting to exercise requires a change of attitude, values, and likely education, not more taxes. Ask yourself how many smokers stopped smoking because of the tobacco tax, or how many heavy drinkers stopped drinking because of alcohol tax - it just does not work like that. Netflix is positive in which it gives you the choice of what to watch, and you do not have to endure commercials, which arguably have a worse effect on people than the movies themselves.
I know that Bob is a regular troll here, but I'm a sucker and will respond anyway.
As an active individual I have no desire to adjust my life around a television schedule, nor pay $50+ a month for a cable service that I rarely use. Cutting that expense to $8 a month makes much more sense for a casual TV/movie consumer. It allows me to not worry about getting "behind" in a series as I can watch it at my own pace, and leave the house at any time without concern about what I am missing. It allows me to have down time when I need it (and as you should very well know, having relaxing time is very important for physical and mental health).
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.
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Folks, it's a measly $8/month for unlimited TV and movies.
How enticing is that? You know what's even cheaper? GETTING OFF YOUR BUTTS
AND MOVING! Instead of asking the family "What do you want to watch
tonight?" ask "Where should we walk to tonight?"
You know, when I get home from work in the winter, it's dark, and usually cold. I do like to get the kids out when I can, but pushing it against the dark and cold leads to sick kids as often as not. And, so, then, we can hop in the auto and pop round to, well, where? The shopping mall? A restaurant? Just the petrol cost will dwarf $8/month.
Golden Girls quote: "What did we do before we sat around like dolts staring at the Television?" "Oh, I remember when I was a kid, we sat around like dolts staring at the Radio."
Get a hobby, build a workshop, wash your dishes by hand and mop the floor - yeah, these are all good alternatives, but for the hours between 6 and 10pm, there's not a lot of decent outdoor activity available in the winter.
Netflix clearly wants to get out of the DVD business and into the more profitable streaming-only business. Netflix could have just raised its streaming+DVD prices a little for a little while, say +$2 for 6 months. Then started charging a little more for DVD deliveries, while offering a rebate to streaming-only customers. After a few months of that structure, they'd have a distinct streaming-only customer group. Then they could have raised prices on streaming or DVD independently. Voila! Two distinct, differently priced products, each profitable, with DVD delivery able to be wound down while making the streaming-only product look better.
Instead they did it in a way that told their customers that they had to take whatever Netflix shoved at them. "Where ya gonna go?" Well, many went, and the brand is damaged even for those who stayed.
It's not too late for Netflix to do the underlying biz transformation right. But the marketing and corporate execs who backed the debacle should take a big hit. The marketing people should probably go, unless the corp execs want to give them a second chance on something like what I described. But probably they should go. There's never any reason to keep a marketer unless they're really a star (which is extremely rare) - there are plenty of non-stars who can take a crack at the next marketing bungle.
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No, Netflix is a place you can watch it TODAY without waiting for the queue.
For the price of a double whopper combo at burger king, essentially.
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A large part of their problems, ironically, can be blamed on iTunes. Or rather, what iTunes did.
Apple came into the market and swept a massive position of power and influence right out from under the music (or rather, content) industry's feet. Apple gained a novel and unrivaled position to dictate the terms of negotiation.
They're still stinging from that.
As a byproduct, they were far more 'prepared' for Netflix. Well, not prepared, as the industry is ancient, slow, bloated and generally can't see "the next big thing" until it's already slapped them across the face and taken their daughter out to dinner.
They were more Apprehensive, really.
They may not have known if Netflix would be a success (by-mail services could never be a threat, and when the streaming came about, similar "on demand" services were rather mediocre) but they knew well enough to keep the reigns on a potentially unwieldy beast.
So Netflix' (possibly unexpected to the Industry) fast growth and explosion in the public mindshare did not end up giving them anywhere near the same control and leverage for negotiations with content owners and producers. Netflix did not secure a completely dominant position, and were unable to supplant the general DVD purchase/rental and theater-going parts of the industry, or at least nowhere near as successfully as iTunes snowballed over CDs.
As such, they're entirely at the whim of industry conglomerates that view them now as something of an enemy, or an annoyance that is profitable enough not to deserve a swat yet.
If the industry wasn't so generally inept, there would have been an MPA-aligned style service already out and Netflix would be deprived of most of its content almost immediately.
Then bigger companies, such as the cable companies, come in with a comparable product, and eat your lunch, because they already have a relationship with the customer
But what kind of relationship is that? It's not a good one.
TiVo was wiped out because all they could fundamentally do is offer a slight improvement to the cable box, once the cable companies started also including a DVR that was it. They couldn't offer additional content, just extra convenience.
Netflix is more than that, they offer a vast array of content that each cable company in turn would have to seek rights for to use the same way. The cable companies can't get a leg up on Netflix in terms of pricing or content because content providers have no motivation to treat them differently or charge them less.
Also Netflix offers a service that I can easily watch on an iPad/iPhone or Roku box or AppleTV or computer, and cable companies are only just starting to think about that stuff. But they will be hampered by the desire to have people watch content on THIER network, not just an arbitrary one. Netflix is the only cable-like company not bound to old-school physical network thinking.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
GETTING OFF YOUR BUTTS AND MOVING!
Says the chiropractic troll while sitting in front of his PC writing furiously to get the first post at Slashdot!
Note to Dr. Bob -- your posts lose most of their enduring qualities when they contain material that may indeed be factual or relevant. Please skip all of that and get straight to subluxions.
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I don't think there's any reason to believe that being out in miserable weather will make you sick -- not if you're maintaining proper body temperature, at least. That's some wives' tale that has lived way past its expiry date. I know not everyone can live in a place where there's a walkable neighborhood, but perhaps you have a public park somewhere?
A successful API design takes a mixture of software design and pedagogy.
Actual it has been shown pretty well that you can change peoples lives with a tax increase.
I'm not sure where the idea that you can't got started, or why people ignore all the times it has worked.
"Ask yourself how many smokers stopped smoking because of the tobacco tax"
It was something like 12%, over a decade. But that's icing. The real number are the amount of people who did't take it up.
Drinking as well.
Of course, that's just one aspect. The tax for tobacco goes to pay for education and medical treatment.
I'm not advocating the tax the OP talks about. Just pointing out the raising taxes reduced smokers and liqueur drinkers. Increase in fuel prices, tax or otherwise, decrease peoples driving.
I would argue for a tax on prepared food to help pay for medical treatment, dietary education, and general education. 10% or so.
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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.
My guess is that they signed some deal with the content providers that they'd pay them for streaming their movies based on the number of Netflix customers ...
So, you unload the DVD customers to a separate company, and suddenly, they don't have to pay for the people who never would've been able to stream in the first place.
Of course, if this were the case, they should've said something ... telling the customers that it was a move to screw over the distributors might've given them some goodwill rather than just piss people off.
Build it, and they will come^Hplain.
Being out in the cold does have some affect on your immune system. Not generally enough to affect a normally healthy person, but I'd guess the combination of the new school years introducing lots of new virus carrying people to everyone, coupled with the fact that people tend to visit relatives etc over the holiday period means that you're exposed to more risk at the point when you're most likely to catch something. There's also the fact that the colder weather and shorter days psychologically make you feel more ill if you do catch something. A cold you write off as nothing during the summer my have you feeling very sorry for yourself during the winter, and over time it's the winter illnesses that stick in the mind. You're right that there's absolutely no reason to believe just going for a brisk walk in a cold park will give you a cold or flue, though.
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.
I'm not your buddy, guy.
Put a bike trainer or treadmill in your garage, and watch Netflix while you exercise. Problems (real and perceived) solved ;-)
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