Netflix isn’t in trouble, Wall Street is.
Let me make this clear, you have “professional” investors and analysts, who focus on money, not art, not the service that Netflix provides, who consistently get it wrong in their own field and tell us what’s on another area will happen? Tenderloin. They are hardly worth listening to. They can’t predict what’s going to happen in their own world, how can they predict what’s going to happen to Netflix?
Netflix is the market leader with first-mover advantage, it has the most customers with the most product and in a quarter it doesn’t blow the doors and not only do we hear that streaming should be questioned, but ads should be inserted… that’s like asking Apple to put every existing port on the Mac, while Steve Jobs ditched the famous old ports and pushed the customer toward a brighter future.
Like Reed Hastings.
Let’s go back here. Hastings said he turned Netflix into a streaming company instead of a DVD by mail company and the public panicked. As it turned out, Hastings knew more than the public. When was the last time you played a DVD? Do you even have a DVD player at home? Hastings blinked, backed off from his statement, re-emphasized DVDs for a minute, then resumed streaming at full speed and revolutionized TV.
Let’s see… Cable subscriptions are gone. Other legacy companies eventually jumped in. And bingeing became a global pastime. But somehow Netflix is in the dumps. Give me a break.
America is addicted to stories. It’s a human desire. TikTok, YouTube, they fill a different need, except when they try to follow the same paradigm, have you heard of Snapchat stories???
So Netflix is the foundation. It never goes to zero. It’s like saying food is on its way. Or air or water.
Well, as long as it doesn’t cost too much.
Yes, Netflix broke the price barrier. To the point where customers started thinking about what they were paying. It used to be cheap, but when it crossed fifteen dollars…
This is psychology, this is why everything you buy is missing a round number with dollar amount and ninety nine cents. Therefore, the prices of music subscriptions should not be increased. You’re not thinking of $9.99, but if you’re going to put a penny over that, you will. And you could cancel.
Investors have no idea what is going on with the hoi polloi. Did you see that online ad guy would make $835 million? And David Solomon, head of Goldman Sachs, has shifted payments on investments so he can earn more. Turns out he’s mad that he doesn’t earn as much as the tech titans. So he gives himself a bigger cut, fuck the investors.
Life is hard at the bottom. What password sharing accounts… May I say I share a password for Hulu? I’m tired of being pecked to death by ducks. I pay for Netflix, Amazon, HBO… it’s an insult to pay for another one.
We solved this problem in the music business, we provide all music for one low price. But in visual entertainment? They took the cable model, imported it to streaming and charged just as much. This is progress? What we need is a streaming bundle, give me all the services at a lower price. But no, these nincompoops don’t want to live in the future, they want to import the past!
Bottom line… Inflation is raging. And despite the large employment figures, look how much most Americans are earning… bupkes! If you have a non-essential service (and I know this contradicts what I said above, but if you’re broke all you need is food and shelter), you’re not offending the customer by raising the price, which Netflix did. As for HBO… most people get it with their cable package. It is only one element in the total price. As for Disney… It’s cheaper and not only does it have a kid’s rate, it also has ‘Star Wars’. That’s like the New York Yankees of visual content, at least the Yankees of yesteryear. You can raise the price of gas and food and get away with it, but entertainment has a ceiling. And often what appears to be a victory is in reality a loss. Overpriced CDs with one good song paved the way for Napster. People felt so ripped off that they didn’t care about stock trading, they didn’t feel guilty. And then the RIAA started suing customers. That’s right, instead of looking to the future, they tried to reaffirm the past. What does that look like today, from a streaming world where revenues are constantly increasing? It is now a global business. Latin flourishes. In the past, physical world music was highly balkanized, but streaming, an advance in distribution, opened the floodgates.
Just like with visual entertainment. “Squid Game”? “Money Robbery”? Those international hits are on Netflix, not the competitors. The competitors are way behind, they have minimal amount of product, especially Apple, tell me why people are going to pay for that service again? Most people still get it for free, at least it’s cheap.
And then Jason Kilar comes along and puts theatrical movies on streaming and Hollywood flips out. Hollywood is like Wall Street, they don’t even know there’s cheese, let alone move them. Come on, investors and analysts, when was the last time you went to a movie theater? That’s for kids!
As for ads… Don’t tarnish the service. That’s like asking Tesla to make a $20,000 car. SiriusXM does not have a free tier and it does quite well, a subscription separates it from the vast wasteland of terrestrial radio. It’s a psychological benefit. As for Hulu… it’s a fading service, with providers fetching their content, and to use it as an example is like listening to the wankers with no audience complaining that they don’t make money from Spotify.
And one thing we’ve learned over and over over the past twenty years is that you either give the public what they want, or you pay the price. The public does not want to be spoon fed. What’s here today will be in the news tomorrow, across all walks of life. But not in entertainment? If you don’t deliver it all now, chances are it will fade and hardly anyone will see it. Waiting week after week for a product is an old model, introduced with the advent of television, nowadays waiting week after week for a show is like delaying an orgasm for months, and nobody likes that. Instant is everything these days, but not when streaming TV? Come on!
As for week to week… Yes, it could work for big hit shows, anointed as great, but those are very few. Sure we have “Ted Lasso”, but did you forget “The Morning Show”? Who still hasn’t recovered from being released week after week? Everyone who saw the entire first season raved about it, but most people didn’t get past the first or two episodes, which were below par. Don’t take the outlier and make it the paradigm for everything. Netflix is built on bingeing, you don’t want to take that aspect away. As for me, I pay for HBO, but I don’t watch their hit shows, always aimed at adults, I can’t be bothered to watch one episode at a time, let alone forget what happened before. And when the series is done, the buzz is over and I don’t even bother, I’m running behind. Whereas when the episodes are released all at once, a series is a time bomb, a cult item that can be discovered at any point in the future. I binged “The Americans” and loved it, I didn’t mind if it was on TV. I binged “Prisoners of War” on Hulu (that’s why I borrowed the password), it was rated by the “New York Times” as the best foreign series of the decade, but I didn’t bother to watch the English remake “Homeland,” even though I pay for Showtime (as part of the mystery cable bundle), if every season had been released in one go, I would have.
I could go further and prove my point, but the truth is that the business people have no idea what the young people are doing, they have no contact. All those week-to-week “hits” are shows for adults, the young ones don’t care about it (except “Star Wars”/”The Mandalorian”). This is like music and CDs and Napster, Hollywood and Wall Street have no contact with the customer.
Netflix must stay on track. People are still adapting to looking for a new product on the service as opposed to cable. And it could figure out how to handle password sharing. Come on old analysts, don’t you remember when everyone stole HBO and other services? You have just removed the filter from your cable or your installer paid for it. Then the cable went digital and that was over. If people want it badly enough, they will pay for it. But don’t make the price too high and… Come on, college students don’t watch cable and forgo Netflix? Don’t be ridiculous. And maybe a lower price for students, as long as you can prove that people are students. Young people don’t worry too much about privacy, they enter their numbers for a deal.
And there is a cap on the number of people who will subscribe to streaming TV outlets. In the end everyone had a smartphone, it became a mature company. But there is still room for Netflix. As for the company losing 35% of its value… God, imagine if these stock pickers and analysts were publicly traded and if they didn’t make as much as the previous quarter, their net worth would drop by a concomitant amount, which is 35 %.
And why can no one stumble or make a mistake at a publicly traded company? Why do profits have to keep rising and rising?
You know who did this best? Jack Welch, at GE. He was essentially cooking the books to appease Wall Street. And then what happened? GE got into a crater, it couldn’t go on. I could define chapter and verse, but this is a story that Wall Street knows. And GE Capital? Looked brilliant before the market collapse. Speaking of foresight… THERE WAS NONE!
What to watch on Netflix…
I point you to my list from more than a year ago:
“Best Series on Netflix in Order”
You can use that for months, if not a whole year. And they are all blue chips!
And how many hours can a person watch television at all? So we were all home during the lockdown and…
The country may be in trouble, but Netflix isn’t… Netflix is forever!