Netflix: Cord Cutter or Hanging on by a Thread? [View article]
Sunk costs? Have you ever shorted or traded any market derivatives? Have you ever speculated on a company that was bought cheap or went bankrupt? I am trying to point out to those who have not that shorting can be a long term strategy just like investing.
Let me try to help you out by looking at the last crisis. A lot of money was made in 2008 when the housing market collapsed. I am sure you were saying "great strategy" back in 2004-2006 when those short positions were being taken. In 2008 you were saying, "Oh, you fools are losing your shorts. Housing prices are going to da mooonnn!" Some people could see the bubble by just looking around their own neighborhood. There were tons of house hunting and flipping shows that showed how inflated prices were when compared to wage inflation. How could those young couples afford almost million dollar houses?
As to NFLX specifically, we are talking about a momentum play that anyone who can do due diligence can see is based on the old 1999 premise of eyeballs. The whole business case here is subscriber growth to balance out rising costs. Would you bet your entire free cash on that when there are plenty of real diversified growth companies you could choose? We'll see who is right as more companies without profits go public with multi-billion (with a B) dollar valuations.
The Challenge of Using Betas to Measure Risk for Tech Companies [View article]
Another great analysis article that shows how skewed NFLX when compared to a bucket of real big cap tech. Another sign that something smells here. So lets compare them to these old behemoths:
IBM 0.73 VZ 0.64 T 0.66 WM 0.63 EXC 0.62 KO 0.61 AEP 0.58 PEP 0.55 XOM 0.49 MCD 0.48 NFLX 0.30
Another indicator that a lot of hogs are going to get slaughtered when this manipulated momo play is finally abandoned by the hedgies. The bulk of the original institutional backers have already taken their profits completely or sold down to a fraction of their original 10% or more holdings. It would be interesting to compare NFLX today to MSFT back when they were using honey pots to smooth their earnings.
Top Sector Buys and Sells of Tiger Global Management [View article]
What's with the Tiger cubs pump on Seeking Alpha this week? This information came out a month ago in the Q1'11 13F filings. Now all of a sudden at least three authors have published about it within the last few days.
Netflix: Cord Cutter or Hanging on by a Thread? [View article]
Now all you long "investors" pay attention to c12mintz and guraaf's comments here. You can average into a "long" short position just like you can a traditional long position. Every time you say, "Oh, you must be short" or "You must be losing a lot of money on your shorts" remember these comments. You are making yourself look markets stupid. There are many ways to play a position no matter which side you are on.
Agree, c12mintz. The recent IPOs of LNKD, P, and RATE are reminiscent of 1999.
Netflix: Cord Cutter or Hanging on by a Thread? [View article]
It also shows that the content owners are in control of their product. NFLX can "go after" all the distributed content they want but ultimately it is the deals between the distributors and the studio/catalog owners that matter. NFLX has always played around the edges but with streaming that will become more and more difficult.
The BB subscription plans have no late fees. You are paying up front, similar to NFLX only includes an additional in store exchange feature. Gives more choice, flexibility, and value for the money to the subscriber:
As part of Dish, BB is no longer a standalone distributor. It becomes another channel in DISH. Dish will be the only big media distributor that can provide content by these methods without building the infrastructure for delivery:
* in (Blockbuster) store physical media rental * (Blockbuster) mail order physical media subscription * (Blockbuster) video on demand internet streaming * (Dish Network) pay TV services * (Dish Network) pay-per-view
Netflix: Cord Cutter or Hanging on by a Thread? [View article]
No short interest remains around 11 million as it has for many months now as the Nasdaq Short Interest 12 month report clearly shows. There are many "long" shorts with deep pockets willing to wait for this prophecy like RIMM today to come to be:
RIMM was at 139 in May 2008 and 40 in December 2008. Today it is 27.50. They were going to rule the world too. Oh, how the might can fall very quickly. It must have been fun to watch those long investors scurrying for the exits.
You can exchange mail order DVDs "as often" as is possible. There are two days the post office has the movie and one for Netflix. The average user will not receive a movie, watch it, and go to the post office the same day. I have studied this with my own subscription the last few months. It goes like this:
Monday - receive movie, watch movie Tuesday - mail back movie Wednesday - email from Netflix received movie, sending next Thursday - receive movie, watch movie Friday - mail back movie Saturday - email from Netflix received movie, sending next repeat
This makes 8 movies a month when you factor in postal holidays. This also makes it $1.25 per movie not including tax. Blockbuster using the 13 per month method comes to 0.92 per movie not including tax.
Netflix: Cord Cutter or Hanging on by a Thread? [View article]
"In the next year, they could easily be bigger than Comcast, Time Warner and all the rest as far as subscribers."
That number is 67+ million. You cannot put NFLX up against each one. They are a collective offering the same services. People move around as new offers and differentiations (like TV Everywhere) are made. That movement is currently from cable to satellite and telco TV.
I have more news to bust your bigger than statement:
I have been with DirecTV for over ten years because they were the only offering that included CNBC World. Now Dish offers it along with other differentiators like 7 Encore and 3 Epix movie channels as part of the regular package. So I will be changing to Dish and Blockbuster. Why switch from long time DirecTV and Netflix subscriber to Dish/Blockbuster?
* 3 months Blockbuster free, a $36 + tax value
* 1 year Encore free, a $60 value (giving it $5/month as part of the normal Starz $12.99/month package)
* 5 in store Blockbuster exchanges, means 13 titles a month for $11.99 on the DVD mail loan program instead of 8 for $9.99 on Netflix. That is 60 more titles per year for a 17% cost increase. A $75 per year value
* 3 Epix Movie channels, 8 to 10 titles a month, $9.99+ value per month and no box office threshold. Over $125/year value.
* new movies on Blockbuster are available on the same schedule as first release pay TV, currently 28 days before Netflix.
* Blockbuster includes video game loans. A good way to try out new games before buying them. Could be a big saving with the cost of games being $30 to $60 per title.
Total $96 signup savings and $200 per year value plus video games included and earlier access to new release movies. Also, I am pretty sure bundling between Dish and Blockbuster will get stronger.
What about streaming? No current offerings provide a subscription for new release movies and current season TV shows. So, I see no value there.
Netflix: Cord Cutter or Hanging on by a Thread? [View article]
First, I'm not the NYT bilton. Saw the stories linked to this story yesterday. Frisco TX outside of Dallas is not a mecca of big media or broadband. A few years ago it was a small country town on a two lane asphalt highway. It looks like just another questionable study by an unknown research group. There are only 23 reports available on their website:
No, the 5 in store exchanges extends the number of videos a month to 13. Netflix is 8. So, for $2 (17%) more a month, you get 62% more content. Not interested in current streaming subscriptions as there is no new content in them. All I gained from the NFLX model change was a knowledge that I have not been getting full value from DVD mail loan as I would wait days to watch the current title.
I will be switching to Dish and Blockbuster when I move within the next 60 days. The EPIX movie channels as part of regular channels, earlier DVD releases, and store/kiosk tie-in with DVD mail make it a more attractive than my longtime DirecTV and Netflix subscriptions. Brilliant move by DISH to give bundling a new meaning beyond the wire. Must be why Ergan is a billionaire.
You forgot about the most popular Blu-ray player, the PS3. There are over 40 million of them. You also are forgetting about Blockbuster back from the dead. Newly infused with backing of a diversified satellite infrastructure and content delivery company. They not only have mail order subscription but an additional set number of in store exchanges per month. This allows more titles to be obtained in a month and without waiting for the 4 day cycle of the normal mail loan system.
I watch at least 10 movies a week. One or two at the theatre, two on DVD from Netflix, and the rest on DirecTV. That's 500 or so a year. You can actually only get about 8 movies a month from Netflix on DVD because of mail holidays. And its not wasting time. It is called multitasking and Tivo. I day/swing scalp trade, do research, twitter, etc.. while watching. Tivo allows time shifting when I need to concentrate on a single task. Just watched The Mummy for the umpteenth time except this AMC presentation had story notes kind of like VH1 popup videos. Made it a completely new experience.
If you want to believe in fairy tales that people actually choose of their own free will, go right ahead. I suppose you do not look at ads on public transport, billboards or other public spaces. No reading of magazines or other publications which might influence your thoughts. Radio commercials anyone. Web page display ads. And of course no one tells you about upcoming or past shows, movies, live events. Bought gas lately where there are ads at the pump. Do you buy groceries, clothes, or other life necessities. Must ignore it all. Right. How do you choose what to eat, drink, cloth yourself in, or do for fun? Oh, that burlap bag will make good clothing. I think I'll buy some of this stuff in this can, some of these in this box, and a few bottles of this. I'll wash myself with some of this soapy liquid and hide my stink with whatever this is. The only way your story comes true is if you live away from society. But then again we already know the answer since you are here.
With today's Pandora IPO, a little parallel perspective is needed. Many have declared the end of terrestrial radio for decades now:
AM is going to die because of FM. Satellite is going to replace both AM and FM. HD is going to replace regular FM.
Guess what. Many years have now passed and radio towers are still here and advertisers are still purchasing spots. The industry adapted. Terrestrial radio is now available on the internet through CBS' radio.com and Clear Channel's iheartradio and many other sources. These are mainstream not indie stations. One thing this allows is for people who spent time in an area to listen to their favorites no matter where they are today. For me that is KROQ in LA. My years there and association with an RCA producer allowed me to hear raw recordings from "great" multi-platinum artists. It was often not good. Most indie shops cannot produce the finished product released by these artists because it takes a lot of talented people and money to shape a professional polished sound. Also, despite many sources for music, I enjoy listening to the latest "hits" on local mainstream radio while in the car. I realize these are mostly "paid" playlists from the industry but for the most part they are the best of the day. Adele is a good example. Many current and previous artists have sounded like her. Some have been better. She has remained at the top of the charts with Rolling in the Deep because the industry made it that way. Not because she is the best ever.
And to reality, I have had a Pandora account for almost the beginning but I seldom use it. Same with Netflix. I watch mainstream TV as I have for most of my life. Today that is on DirecTV. I spend about 80 hours a week watching it and 4 to 5 hours a week with Netflix. I get 10 times the value compared to NFLX. Netflix could well become the supplier of indie content but many customers like myself will leave. We want polished new content which the industry has made us feel we "need" to see.
Yes, there are a lot of indie music sources but they mostly do not measure up. Lyrics are weak or production is haphazard. Industry has many decades of experience at refining content. Same is true of the motion picture industry. Their supply chain will continue to dominate because their money shapes public perception of quality and value for the money. That has not changed since the days of silent pictures and continued innovation like Dolby Surround Sound and 3D make it true today.
If It's Really All About Content, There's No Room For Netflix [View article]
Netflix: Cord Cutter or Hanging on by a Thread? [View article]
Let me try to help you out by looking at the last crisis. A lot of money was made in 2008 when the housing market collapsed. I am sure you were saying "great strategy" back in 2004-2006 when those short positions were being taken. In 2008 you were saying, "Oh, you fools are losing your shorts. Housing prices are going to da mooonnn!" Some people could see the bubble by just looking around their own neighborhood. There were tons of house hunting and flipping shows that showed how inflated prices were when compared to wage inflation. How could those young couples afford almost million dollar houses?
As to NFLX specifically, we are talking about a momentum play that anyone who can do due diligence can see is based on the old 1999 premise of eyeballs. The whole business case here is subscriber growth to balance out rising costs. Would you bet your entire free cash on that when there are plenty of real diversified growth companies you could choose? We'll see who is right as more companies without profits go public with multi-billion (with a B) dollar valuations.
The Challenge of Using Betas to Measure Risk for Tech Companies [View article]
IBM 0.73
VZ 0.64
T 0.66
WM 0.63
EXC 0.62
KO 0.61
AEP 0.58
PEP 0.55
XOM 0.49
MCD 0.48
NFLX 0.30
Another indicator that a lot of hogs are going to get slaughtered when this manipulated momo play is finally abandoned by the hedgies. The bulk of the original institutional backers have already taken their profits completely or sold down to a fraction of their original 10% or more holdings. It would be interesting to compare NFLX today to MSFT back when they were using honey pots to smooth their earnings.
Top Sector Buys and Sells of Tiger Global Management [View article]
holdings.nasdaq.com/as...=NFLX
Netflix: Cord Cutter or Hanging on by a Thread? [View article]
Agree, c12mintz. The recent IPOs of LNKD, P, and RATE are reminiscent of 1999.
Netflix: Cord Cutter or Hanging on by a Thread? [View article]
Netflix Keeps Rising [View article]
www.blockbuster.com/si.../
As part of Dish, BB is no longer a standalone distributor. It becomes another channel in DISH. Dish will be the only big media distributor that can provide content by these methods without building the infrastructure for delivery:
* in (Blockbuster) store physical media rental
* (Blockbuster) mail order physical media subscription
* (Blockbuster) video on demand internet streaming
* (Dish Network) pay TV services
* (Dish Network) pay-per-view
Netflix: Cord Cutter or Hanging on by a Thread? [View article]
www.nasdaqtrader.com/T...
RIMM was at 139 in May 2008 and 40 in December 2008. Today it is 27.50. They were going to rule the world too. Oh, how the might can fall very quickly. It must have been fun to watch those long investors scurrying for the exits.
Netflix Keeps Rising [View article]
Monday - receive movie, watch movie
Tuesday - mail back movie
Wednesday - email from Netflix received movie, sending next
Thursday - receive movie, watch movie
Friday - mail back movie
Saturday - email from Netflix received movie, sending next
repeat
This makes 8 movies a month when you factor in postal holidays. This also makes it $1.25 per movie not including tax. Blockbuster using the 13 per month method comes to 0.92 per movie not including tax.
Netflix: Cord Cutter or Hanging on by a Thread? [View article]
That number is 67+ million. You cannot put NFLX up against each one. They are a collective offering the same services. People move around as new offers and differentiations (like TV Everywhere) are made. That movement is currently from cable to satellite and telco TV.
I have more news to bust your bigger than statement:
I have been with DirecTV for over ten years because they were the only offering that included CNBC World. Now Dish offers it along with other differentiators like 7 Encore and 3 Epix movie channels as part of the regular package. So I will be changing to Dish and Blockbuster. Why switch from long time DirecTV and Netflix subscriber to Dish/Blockbuster?
* 3 months Blockbuster free, a $36 + tax value
* 1 year Encore free, a $60 value (giving it $5/month as part of the normal Starz $12.99/month package)
* 5 in store Blockbuster exchanges, means 13 titles a month for $11.99 on the DVD mail loan program instead of 8 for $9.99 on Netflix. That is 60 more titles per year for a 17% cost increase. A $75 per year value
* 3 Epix Movie channels, 8 to 10 titles a month, $9.99+ value per month and no box office threshold. Over $125/year value.
* new movies on Blockbuster are available on the same schedule as first release pay TV, currently 28 days before Netflix.
* Blockbuster includes video game loans. A good way to try out new games before buying them. Could be a big saving with the cost of games being $30 to $60 per title.
Total $96 signup savings and $200 per year value plus video games included and earlier access to new release movies. Also, I am pretty sure bundling between Dish and Blockbuster will get stronger.
What about streaming? No current offerings provide a subscription for new release movies and current season TV shows. So, I see no value there.
Netflix: Cord Cutter or Hanging on by a Thread? [View article]
tdgresearch.com/shops/...
Here's Pant's and Greeson's profiles. Apparently she lives in India:
in.linkedin.com/pub/vi...
pro.gigaom.com/members...
I would take the whole thing with a gain of salt.
Netflix Keeps Rising [View article]
I will be switching to Dish and Blockbuster when I move within the next 60 days. The EPIX movie channels as part of regular channels, earlier DVD releases, and store/kiosk tie-in with DVD mail make it a more attractive than my longtime DirecTV and Netflix subscriptions. Brilliant move by DISH to give bundling a new meaning beyond the wire. Must be why Ergan is a billionaire.
Netflix Keeps Rising [View article]
Time Warner Just Gets It [View article]
If you want to believe in fairy tales that people actually choose of their own free will, go right ahead. I suppose you do not look at ads on public transport, billboards or other public spaces. No reading of magazines or other publications which might influence your thoughts. Radio commercials anyone. Web page display ads. And of course no one tells you about upcoming or past shows, movies, live events. Bought gas lately where there are ads at the pump. Do you buy groceries, clothes, or other life necessities. Must ignore it all. Right. How do you choose what to eat, drink, cloth yourself in, or do for fun? Oh, that burlap bag will make good clothing. I think I'll buy some of this stuff in this can, some of these in this box, and a few bottles of this. I'll wash myself with some of this soapy liquid and hide my stink with whatever this is. The only way your story comes true is if you live away from society. But then again we already know the answer since you are here.
Time Warner Just Gets It [View article]
AM is going to die because of FM.
Satellite is going to replace both AM and FM.
HD is going to replace regular FM.
Guess what. Many years have now passed and radio towers are still here and advertisers are still purchasing spots. The industry adapted. Terrestrial radio is now available on the internet through CBS' radio.com and Clear Channel's iheartradio and many other sources. These are mainstream not indie stations. One thing this allows is for people who spent time in an area to listen to their favorites no matter where they are today. For me that is KROQ in LA. My years there and association with an RCA producer allowed me to hear raw recordings from "great" multi-platinum artists. It was often not good. Most indie shops cannot produce the finished product released by these artists because it takes a lot of talented people and money to shape a professional polished sound. Also, despite many sources for music, I enjoy listening to the latest "hits" on local mainstream radio while in the car. I realize these are mostly "paid" playlists from the industry but for the most part they are the best of the day. Adele is a good example. Many current and previous artists have sounded like her. Some have been better. She has remained at the top of the charts with Rolling in the Deep because the industry made it that way. Not because she is the best ever.
And to reality, I have had a Pandora account for almost the beginning but I seldom use it. Same with Netflix. I watch mainstream TV as I have for most of my life. Today that is on DirecTV. I spend about 80 hours a week watching it and 4 to 5 hours a week with Netflix. I get 10 times the value compared to NFLX. Netflix could well become the supplier of indie content but many customers like myself will leave. We want polished new content which the industry has made us feel we "need" to see.
Yes, there are a lot of indie music sources but they mostly do not measure up. Lyrics are weak or production is haphazard. Industry has many decades of experience at refining content. Same is true of the motion picture industry. Their supply chain will continue to dominate because their money shapes public perception of quality and value for the money. That has not changed since the days of silent pictures and continued innovation like Dolby Surround Sound and 3D make it true today.