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skibimamex

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  • Netflix Earnings Preview: Euphoria Of Q4 2013 To Subside In Q1 2014 [View article]
    Disney also has billions of off balance sheet liabilities because it has to spend billions annually to produce and underwrite move production. oh it's not disclosed on the balance sheet, nor is it even a contractual commitment yet -- of course it will have to spend it in order to have a slate of movies to show in theaters in 2017.

    But netflix has "committed" to pay Disney for exclusive rights its studio output for 2017. but it's not on the balance sheet yet disclosed as a contractual commitment. it is not on the balance sheet because neither the asset (the film rights when it is actually available to be shown) nor the liability can be capitalized yet according to GAAP. But isn't Netflix committed -- yes that is why it is disclosed as a contractual commitment, but it isn't allowed to be capitalized until the film is available to stream. What you say, what happens if Disney doesn't deliver the films -- well netflix's commitment to pay is only contingent on Disney's actually delivering films and the price per film is adjusted depending upon its box office performance. But surely Disney will deliver the films since that's what is its business. Yep that's true.

    Oh by the way, Disney hasn't even decided what films to release that year yet. No it hasn't even committed to which films but have several projects in development for 2015 and 2016, and maybe some of those will slip to 2017. so does the fact that Disney promised to deliver minimum of a certain number of films for release in 2017 to be streamed and guaranteed certain box office results, so is that a liability on its balance sheet. are you crazy, dont you know accounting, it's not a commitment until it contracts with writers, producers, directors, and actors, and projects have different milestones and canceled all the time.

    Wait so disney has promised a certain number of films and fully expects to eventually spend billions to produce and promote these releases but none of this is no balance sheet as a liability even though we know it will spend billions each year. of course not it is not capitalized as a liability when it is a commitment -- that's contractual commitment; once they spend the money then it is capitalized as an asset and if they borrowed to fund it then it is matched with a liability.

    So a commitment by netflix to pay for output that the disney Studio hasnt even thought of yet and contingent entirely on Disney delivering the product with price adjustments depending upon the film's popularity --- now why is that supposed to be on the balance sheet again, when the film rights to a movie that hasnt been thought of, hasn't been made, and hasnt been released, and isn't available for streaming-- why should it be capitalized today. Oh you want the liability on the balance sheet but not the asset. I guess these folks never did pass that accounting class.
    Apr 18 08:55 PM | Likes Like |Link to Comment
  • Netflix Is Still Wildly Undervalued [View article]
    "Competition and the realities of the video programming business will permanently clamp margins and significantly slow the growth."

    "Will this happen to all companies in the space or just Netflix?"

    HBO has 35%+ EBIT margins and spends 40%+ of its annual content budget on originals, and the remaining on licensed spend (both pay cable 1 window from Warner, Universal, Fox, as well as catalog fare from these and other studios, plus specials such as sports and its late-night mature content).


    so other than the good cocktail hour soundbite about the "realities of the video programming business"m what is it about those "realities" that destine it to low margins while everyone in hollywood that ever pitched programming network business models all think 30%+ margins are the norm.


    I will say something controversial: all programming content (except iconic children's programming that has constant audience replenishment) goes DOWN in licensing value over time. This is because the economic utility value of each piece of content once it has been viewed is of lesser value thereater. You can look at the value of licensing for any property: Sex in the City, or Seinfeld, in syndication 10 yrs ago commanded a lot more per broadcast than it does today because the content is no longer as fresh.


    Where content prices that are going up is on FRESH content (that includes live sports, but that content has instant obsolesence) which is driven by competition. Either studios or production houses competing for the next hot property - be it directors, screenwriter, story, or actor. However, the guy with more distribution power can always win. Thus a Disney Studios can always outbid a movie project than FilmDistrict or other independents can. Same with the serial drama segment in television.


    On the licensing front, each serial dramatic series (like new release movies) has the greatest audience appeal and licensing value on its first release (exclusive is now the paradigm) and the property diminishes in value over time and eventually is priced as "filler" (like the WalMart $1 DVD bin) when it is non-eclusive catalog fare.


    So it is comical that the outrageous statements by prognosticators such as Pachter fool that loudly proclaim "content prices are going up because the content owners will dictate prices" -- wrong competition from bidders dictates prices, and those with the largest ability to monetize can pay the most. And content prices for each specific property actually continually goes down over time. Content SPEND at Hulu, Amazon, and Netflix are going up is because they are buying MORE content rather than the same content having price increases. However, the quality of content spend may also move to higher-value (i.e. higher priced content) in order to generate increased audience appeal. For example, Hulu may fill its catalog with independent foreign films and some catalog fare from A&E on the mystery of Mayan calendars or ancient visits by aliens, but when it cna afford to as its subscriber base expands, it will clearly redeploy that spend into content that has more audience appeal, which will be higher priced per hour. So it's not that the History Channel's catalog is going up in price, it's because Hulu choses to divert more budget to higher value content.
    Mar 5 10:08 AM | 1 Like Like |Link to Comment
  • WSJ: SoftBank's Son to mount PR campaign for Sprint/T-Mobile deal [View news story]
    So DOJ and FCC will be put in the place of protecting the VZ-T duopoly?

    SB can easily preserve the "uncarrier persona" of the attacker by making the long-haired Legere the surviving CEO and the TMUS management team the primary surviving mgmt team -- Seattle will be easier to commute from Japan anyway, and 2 timezones closer.
    Mar 4 11:16 PM | Likes Like |Link to Comment
  • Big day for monolines after MBIA and Ambac results [View news story]
    when there is improved visibility on Detroit (status of GO obligations whether it is considered unsecured) and incremental clarity on Puerto Rico. No hurry for rating agencies to act.
    Mar 4 08:26 PM | Likes Like |Link to Comment
  • NTELOS Investors Are Leaping To The Wrong Conclusion [View article]
    Wait it dropped 22% in the first month and then went up 50% from the low (+20% from your short call), after company announced resolution of billing dispute with Sprint, and stock stayed up there in the $21 range for nearly 2 months. So now that we are down again, so your call was 66% right (down 20% twice, up 20% counting from your call date price).

    Since your article now is blocked except for Pro subscribers, I can't really remember about what part of your investment thesis actually was correct. In any case, I don't recall your call was a trading call but rather more of a fundamental call -- meaning I am curious why you would cover now if the investment thesis still has room to run, or what part of your investment thesis are you now abandoning since you have chosen to cover the short position.

    I actually seemingly agree with you since your covering the short is same as me adding some long today although damn stock didn't stay down too long from initial crush yesterday. Probably will grind down further from a trading standpoint so I am a bit surprised you bailed.
    Feb 28 09:59 AM | Likes Like |Link to Comment
  • Comcast-Netflix Deal Plants A Flag In The Sand Of Net Neutrality [View article]
    you have to understand that peering, notwithstanding the popular press that seems to comingles it with net neutrality, has actually nothing to do with net neutrality. Comcast was already, and still is, under its consent agreement with FCC in approving the Comcast-NBCUniversal merger that Comcast will act according to the framework of the Net Neutrality policies previously set by the FCC. Comcast didn't single Netflix out in terms of peering (which isnt covered by Net Neutrality regarding last mile discrimination and MVPD conflict); Comcast had a financial dispute with Cogent, an internet back-haul provider, which resulted in service degradation for ALL of Cogent's customers (including Netflix in this instance).

    Netflix was already setting up its own CDN's to interconnect directly to ISP's such as Comcast (and thus bypassing the pipes of, and costs it paid to, Cogent) to both reduce costs but more importantly improve service by locating cached content closer to the last mile. But as opposed to others such as FB, GOOG, etc who had paid to interconnect directly to the ISP, Netflix had been trying to do so on the basis that the ISP would (with investment from both Netflix and the ISP to support such direct inter-connection) thus improve the service quality of the Netflix stream to the ISP's customers and the ISP sell higher bandwidth (and higher priced and higher margin) last-mile connectivity to users.

    Peering applies to the back plumbing of the internet and is not directly addressed by the Net Neutrality debate. Nothing in Net Neutrality policy for example would have limited data caps (like what is applied in Canada) so long as such data caps were non-discriminatory -- which is on the retail consumer side anyway. Regarding the peering, Net Neutrality did not legislate that one must provide free peerage to all. But rather, the ISP as last mile provider, couldn't discriminate against specific content that came in the back door that conflicted with his own retail offering. Thus a Google Fiber can't block Facebook because Google prefers everyone be using Google +. The peering industry protocol had already included multiple areas for price barter in traffic management under concept of equal "balance of trade" -- reminds me that in early days of cellular, there was phenomenon of initial inter-carrier roaming arrangements shifting to "calling party bills" because carriers found that balance of trade was often not out of whack and it was simply easier to view it as simple barter rather than go through the headache of keeping track. OF course that changes the minute there is asymmetrical balance of trade, which is what is happening here.

    Not clear yet is whether these direct peering arrangements will be more costly or more economical than existing commercial relationships of what Netflix is paying Cogent and others for example, but the interconnection service quality level is assuredly going to improve with a direct connection..
    Feb 24 04:18 PM | Likes Like |Link to Comment
  • Inventory Risks Loom For Apple [View article]
    i enjoy reading Mr. Blair's blogs, as they give me the occasional laugh, and even more so, the vitriol from responders. What I find most entertaining about MB's arguments about his purported investment thesis is that his ability to be inconsistent in his arguments while holding a straight face.

    "Apple seems to see India and Brazil as dumping grounds for its unsold inventory of iPhone 4S and is rumored to be considering restarting production of the antique device for sales at lower prices in India and Brazil."

    Why would it be a "dumping ground for unsold inventory" if it is "rumored considering restarting production" -- so which is it, new production, or dumping ground. I get so confused, what is the point again?

    Basically his argument is that smartphone market is mature or maturing -- yes it is, and that the bulk of the growth are in segments that AAPL doesnt participate in or isn't viewed as competitive. Let's see, the auto industry is very mature with what growth there is only in emerging markets but yet Daimler and BMW continue to thrive. Why are they not doomed again? Oh a car is not a commodity and brand image, distribution presence, service network, ability to to hold value, engineering strength, and quality of product, are all elements of their success.

    Oh that's right, I forgot, it's because all things electronic must be commoditized. He is entitled to his investment thesis. What is silly is that all the monies that he will lose from his modest investment position will presumably be made up, and more, by the clicks he gets to monetize his blog writing. You see, Mr. Blair, like a Howard Stern, is in the shock-jock entertainment business, not the investment advice business, so he stakes out views to entertain us, and I do get the occasional chuckle.

    Keep it up with the funny writing. Will sit back and watch the sardonic comedy and bear parody.
    Feb 22 03:04 PM | 11 Likes Like |Link to Comment
  • Second season of House of Cards delivers for Netflix [View news story]
    so you want to move abroad to watch it or wait until 4 years AFTER the last season. it is a 4 yr exclusive that tolls an addiitonal year for each new season that Netflix buys (it already bought the 3rd season).

    So what is your point exactly? This is how television shows are financed; splitting up the license rights by geography and viewing windows. Netflix is in the subscriber satisfaciton business not the content syndication business. Even HBO's Sex in the City now syndicated over independent broadcast and other cable rerun networks -- you think that has any effect on core HBO channel that SITC would have any value if it were being shown on HBO, 9 years after its last season in 2004.
    Feb 19 10:55 AM | Likes Like |Link to Comment
  • Netflix Is Still Wildly Undervalued [View article]
    Johnwoods, Apple is a partner with Netflix, and the Netflix app is the featured app on Apple TV, as it is on Roku, Boxee, google's Chromecast.... Apple TV is an access device to access all content where it wants a rev share model. I subscribe to both Netflix and Hulu + via my Apple ID account. a Tiem-Warner Cable app is not a competitor to Netflix -- Netflix is just another channel. that's why Malone's Virgin Media in the UK and other cable operators in Europe are distributors of Netflix by integrating the service on their Tivo set-top boxes.
    Feb 12 09:21 PM | Likes Like |Link to Comment
  • Netflix Is Still Wildly Undervalued [View article]
    ahem, they do because the cost of acquisition to establish distribution is huge. No one comes close to Netflix's efficient CPGA. Yes "it" does also apply to other content providers. That is why Disney, one of the strongest media companies in the world, agreed to license its studio output deal EXCLUSIVELY with Netflix after its Starz output contract expires in 2015, and even more importantly, Disney licensing its children's film library (Disney, Pixar, Disney Animation) to Netflix as the only other streaming outlet other than Disney's own Disney Channel streaming service (did you get that, Disney chose to leverage Netflix's distribution to get to the widest audience possible, rather than relying on Disney's own,...because that is how Disney can best monetize its content -- it's called distribution in order to generate the broadest audience).
    Feb 12 09:13 PM | 2 Likes Like |Link to Comment
  • Fewer 3D movies a concern for movie industry [View news story]
    That makes IMAX even more important to the studios and exhibitors that have IMAX franchises, as the only premium venue that offers differentiated immersive viewing experience that can command ticket premiums.

    IMAX is NOT 3D, although some IMAX films may also be in 3D. Many films are converted via DMR (or originally shot using IMAX cameras) in order to utilize IMAX's taller aspect ratio and higher resolution.

    Who's really going to be hurting is RealD's biz model that directly hangs on 3D attendance.
    Feb 3 05:13 PM | Likes Like |Link to Comment
  • Netflix Holds On, But Where Does It Go From Here? [View article]
    wait I'm bored with NCIS and Criminal minds on CBS, and now am back into the Grimm and the new Blacklist on NBC. I guess CBS must be preparing for its going out of business sale.

    Why do people think their personal taste would necessarily dictate what the other 130M households may have appetite for? alternatively, why do people think there's logically only a 1-channel universe (that's what a Netflix, or a Hulu, or an Amazon are) when the world of television entertainment and theatrical entertainment are littered with evidence otherwise.

    Why are there 6 major studios and 50 independents? why are there 300 channels on television..... why are there seven major premium pay channels on MVPD (HBO, Cinemax, Showtime, TMC, Epix, Starz, and Encore) and why dont they just turn into one channel. which leads to the question why do you think it will be a zero-sum game where each of Amazon, Hulu, and Netflix (can even throw ad-supported Crackle and Viki into the pot) there can only be one winner and everyone else loses, instead of these new channels evolving into separate programming networks that complement each other? That's the fundamental flaw in you thesis, that you think of these services as substitutes for each other (you can think of the same for ABC, NBC, CBS, Fox, and CW that way too) but the evidence in the history of television media suggests that the industry will develop otherwise.
    Jan 30 10:12 PM | 1 Like Like |Link to Comment
  • Netflix Earnings Preview - Watch High Expectations [View article]
    Mintz, I think you mentioned that you were wrong for the past 7 quarters, with appropriate self-deprecation by the way (that's why I love you - at least some degree of balance), but yet mgmt seemingly has developed pretty high degree of ability to meet their forecasts. Perhaps just means that as the business scales it has itself become more stable or that management has many more levers and sufficient early warning signals in order to manage to their plan.

    I am not sure about your comment about international subs -- given the population footprint of the other 40 countries, even if you throw out all of LATAM, and their relative more nascent penetration, I am surprised that the international nets have not already exceeded the US nets. However, it seems that they have already put a placeholder on 2Q seasonality impact on nets so I am hopeful that we will see a dip in stock from 2Q results (or 1Q report that will rock 2Q guidance) so you can still be right on those $290's, probably later this summer. My AH limit to sell some more of my long at $395 hasn't cleared yet,...but maybe in pre-market, I hope.
    Jan 22 06:22 PM | Likes Like |Link to Comment
  • Netflix Earnings Preview - Watch High Expectations [View article]
    I think that first digit on the stock price may be incorrect. It's at $389 AH. But your short is a long-term thesis so hard to pick right timing. Best bet is to short more if you are true believer.

    However, the continued subscriber momentum does seem to challenge all those strong believers in imminent saturation.....but they will be right at some point, I suppose.
    Jan 22 04:48 PM | Likes Like |Link to Comment
  • More on Netflix: Profits, pricing, and expansion in the mix [View news story]
    it's at $389 in AH right now. Just like last quarter. Probably comes back tomorrow.
    Jan 22 04:39 PM | 2 Likes Like |Link to Comment
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