Seeking Alpha

Netflix (NFLX -0.3%) expands its licensing deal with PBS to cover several additional shows; the...

Netflix (NFLX -0.3%) expands its licensing deal with PBS to cover several additional shows; the deal provides exclusive access to all seasons of mystery drama The Bletchley Circle, and to kids' show Super Why!. Amazon expanded its PBS deal last week. Also: 1) A Cowen survey of 1K consumers found 44% were aware of Netflix original programming, up from 34% in Feb., and 28% of Arrested Development.viewers saying they're less likely to cancel their Netflix subscriptions thanks to it. 2) Whitney Tilson remains quite bullish, arguing Netflix "could have a market cap like Amazon’s or something of $100 billion" in 10 years. But he adds "execution risk" leads him to limit his position to 3%-4% of his fund's assets.
Comments (7)
  • Good news for Netflix!
    3 Jul 2013, 11:22 AM Reply Like
  • Wow... Tilson is off the deep end. He does realize that maybe 5% of AMZN is the streaming business...?
    3 Jul 2013, 11:25 AM Reply Like
  • >Wow... Tilson is off the deep end.

     

    Yeah, no kidding. Amazon is a retail giant.

     

    That aside, Netflix has that price point dialed in such that it never seems worth NOT having. It's cheap enough that it's justifiable if you look at it twice a month.

     

    Arrested Development has prevented me from cancelling my account (House of Cards is also intriguing), because up here in Canada the catalog sucks.

     

    Original content is the future for Netflix (which isn't an easy racket). Outside of branding, there's nothing that Netflix does that the content owners can't replicate. And, who knows, in the future we may live in a world of cheap, independent, direct distribution of content, making their business model superfluous.
    3 Jul 2013, 11:39 AM Reply Like
  • Just read the Tilson interview. This was a very misleading quote by Seeking Alpha editors. He says "in ten years or so," adds that he has been trimming his position, and says over 50% spread factor on his estimated value.

     

    I retract that he is "out of his mind." However, NFLX has made a bit of a joke out of Tilson, so I'm surprised Forbes gives him so much credit. It's like the interviewer is sucking up to him. No on second thought, it's not "like," it is.
    3 Jul 2013, 12:08 PM Reply Like
  • If investors keep supporting NFLX shares priced at 500+ P/E, well sure, "the HBO of the Internet" could have a $100B market cap in 10 years. Sooner. If NFLX was priced like, say, the actual HBO's home base TWX, at a P/E of ~18, right now NFLX would have a market cap of less than $500M. So the question is really this: how long can NFLX sustain momo stock "future is priceless" status before marginal profitability sinks valuation? A reasonable guess...that runway is months, not years...
    3 Jul 2013, 03:04 PM Reply Like
  • @DigitalMediaView I always enjoy your take on things. I think Netflix is way over valued here. I feel like the subs for this quarter or the outlook will disappoint. To much hype in the so called original content they are producing. Also I think Amazon is taking some of those subs. Cheers and Happy trading
    4 Jul 2013, 06:04 PM Reply Like
  • One other thing I will add is as the economy improves cord cutting will slow
    5 Jul 2013, 09:08 AM Reply Like
DJIA (DIA) S&P 500 (SPY)