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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.
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
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.
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.
-- This space for lease, low setup fee, inquire within!
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.
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.
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