[PSound]



Quote:
Netflix's second-quarter profit rose 22% as the No. 1 U.S. movie-rental service via mail used its video-streaming offering to grow its subscriber base to the high end of its April forecast. Shares of the company fell slightly after hours as the company lagged analysts' revenue estimates.


Net income was $32.4 million, or 54¢ a share, from $26.6 million, or 42¢, a year earlier, as sales rose 21% to $408.5 million, Netflix said in a statement today. The company, which widened its subscriber base from a year earlier by 26% to 10.6 million, was expected to earn 50¢ a share on $409.7 million in sales, the average analyst estimate in a Thomson Reuters survey.


Netflix has been augmenting its by-mail service with its video-streaming product and has signed agreements to make its digital titles playable on a broader number of electronic components. The company earlier this month said its digital titles will be playable on Sony Bravia high-definition TVs. Netflix reached similar agreements for Samsung home theater systems, and LG Electronics TVs and Blu-ray players during the quarter.

Quote:
Still, the company, which spends about half of its cost of goods sold on postal shipments, is looking to cut that number down to a third as a higher percentage of its subscribers switch to streaming, Hastings said today.

http://www.videobusiness.com/article/CA6672848.html

 

[lakers42]

He also said today that a streaming only business would be difficult. The real reason being that studios won't give them unlimited streaming rights day/date. Since Netflix won't offer a streaming rental option for new titles, they won't get day/date streaming because it's not a good revenue model for studios when there is a pay per view rental market opportunity for new releases.

http://www.homemediamagazine.com/net...urges-22-16515

 

[mproper]



Quote:
Originally Posted by lakers42 /forum/post/16881021


He also said today that a streaming only business would be difficult. The real reason being that studios won't give them unlimited streaming rights day/date. Since Netflix won't offer a streaming rental option for new titles, they won't get day/date streaming because it's not a good revenue model for studios when there is a pay per view rental market opportunity for new releases.

http://www.homemediamagazine.com/net...urges-22-16515

Sorry, where does he say that in that article? He doesn't say anything about studios not giving day/date All I see is this:

Quote:
He said launching a standalone streaming business would be difficult due to the lack of comparable content available on DVD and Blu-ray.


“We may test streaming only but don’t believe it will be consequential,” Hastings said.

he also says this:

Quote:
Hastings said Netflix spends half of its costs on postage and handling of DVDs, a percentage he would like to reduce and instead pay the studios more for better streaming content.


“We look forward to paying [studios] more money,” he said.

 

[PSound]

We already know there will be studio resistance due to fear of change.


The reality of the marketplace (particularly the drop in physical media value) will be the catalyst for change. As the price (and revenue) around physical media drops, the studios must look to methods that reduce their costs and offer revenue growth. Duh!

 

[lakers42]



Quote:
Originally Posted by mproper /forum/post/16881105


Sorry, where does he say that in that article? He doesn't say anything about studios not giving day/date All I see is this:



he also says this:

He doesn't have to say it. He knows that the studios won't give him unlimited day/date cloud access unless he increases prices for an all you can eat buffet. Hastings knows that new content doesn't come cheaply. The reason I ask how much you're willing to pay for unlimited access to streaming day/date releases is because Netflix is trying to find out the same thing. Right now customers are happy because it's part of their disc service. As a stand alone service and by also adding new titles, it's going to cost Netflix and they know it. They're just trying to find out how much a customer is willing to pay.


How much are you willing to pay?

 

[mproper]



Quote:
Originally Posted by lakers42 /forum/post/16881336


He doesn't have to say it. He knows that the studios won't give him unlimited day/date cloud access unless he increases prices for an all you can eat buffet. Hastings knows that new content doesn't come cheaply. The reason I ask how much you're willing to pay for unlimited access to streaming day/date releases is because Netflix is trying to find out the same thing. Right now customers are happy because it's part of their disc service. As a stand alone service and by also adding new titles, it's going to cost Netflix and they know it. They're just trying to find out how much a customer is willing to pay.


How much are you willing to pay?

I think you are putting words in his mouth, and jumping to assumptions. Like when you say this it comes across as FUD and making it sound like that's what he said, when it's not at all (everything after "would be difficult" is your conjecture):

Quote:
He also said today that a streaming only business would be difficult. The real reason being ...

I answered the "how much" question before and just now in the other thread. No need to repeat it here.

 

[lakers42]



Quote:
Originally Posted by mproper /forum/post/16881369


I think you are putting words in his mouth, and jumping to assumptions. Like when you say this it comes across as FUD and making it sound like that's what he said, when it's not at all (everything after "would be difficult" is your conjecture):



I answered the "how much" question before and just now in the other thread. No need to repeat it here.

I assure you that I'm not putting words in his mouth.

 

[PSound]

Here IS what Reed Hastings said:

Quote:
Still, the company, which spends about half of its cost of goods sold on postal shipments, is looking to cut that number down to a third as a higher percentage of its subscribers switch to streaming, Hastings said today.

 

[bt12483]

"Netflix stock downgraded after Q2 earnings

DIGITAL: Lack of separate streaming charge might hurt profit growth, analyst says"

Quote:
JULY 27 | DIGITAL: On the heels of Netflix’s strong second-quarter earnings report, some financial analysts are musing about whether now is the time to sell.


Netflix last week reported that its second-quarter earnings jumped 22% from a year earlier after boosting its sales and expanding its subscriber base by 21% and 26%, respectively.


With earnings out and its stock price up 40% this year, investors might want to see how Netflix’s spending increase on video-streaming technology and inventory continues to affect the company’s bottom line before buying more shares, wrote Wedbush Morgan analyst Michael Pachter, who cut his rating on the stock to ‘neutral’ from ‘outperform’ last Friday. Pachter also cited evidence that subscribers are trading down to cheaper monthly subscription plans.


Oppenheimer & Co. analyst Jason Helfstein also downgraded Netflix on Friday, to ‘underperform’ from ‘perform.’


“We think that lower average revenue per user may signal that Netflix is losing its higher rate plan subscribers in favor of lower rate users,” Wedbush wrote. “If [average revenue per user] continues to fall, revenue growth will be limited, and if operating margin is managed at a constant 10%, earnings per share growth will face a similar challenge.”


Since earnings were released after the market closed last Thursday, Netflix shares have dropped 10% to $41.70 a share. Before Thursday, the stock had jumped 55% this year, compared to a 25% increase for the Nasdaq Composite Index.


Netflix shares, which rose more than 50% to more than $50 a share between the beginning of the year and late-April, dropped below $38 a share last month after Lazard Capital Markets analyst Barton Crockett initiated coverage with a “sell” rating and noted that the company’s “Watch Instantly” video-streaming service might be slowed by competing services from Google’s YouTube and the News Corp.- and NBC Universal-owned Hulu. Merrill Lynch’s Nat Schindler also said shares would likely tumble once the stock market takes into account that the company doesn’t charge extra for the streaming service.

http://www.videobusiness.com/article...dustryid=47212

 

[PSound]

I love that last bolded part. Like it is some big revelation that Netflix does not charge for streaming, and a whole bunch of investors are going to simultaneously discover this shocking secret and dump the stock. ROFL!!

 

[PSound]

That analyst was right! Netflix stock is HURTING!!

Quote:
Netflix to buy back as much as $300 million in stock


Aside from the occasional technical glitch, Netflix continues to make its shareholders happy, both with its financial performance and corporate strategy.


The largest U.S. movie-rental service via mail, which suffered an outage to its video-streaming service last night, said late last week that it would buy back as much as $300 million in stock, or about 11% of its market value, by the end of next year. The announcement follows its January plan to reacquire as much as $175 million in shares.



Shares of Netflix, which advanced 3.3% the day of the Aug. 6 buyback announcement, have surged this year as earnings continue to improve on a wider subscriber base and expanding use of its video-streaming service. The company said last month that second-quarter earnings jumped 22% from a year earlier, after boosting its sales and expanding its subscriber base by 21% and 26%, respectively.

Netflix stock has surged 53% this year, compared with a 26% increase for the Nasdaq Composite index.


Netflix has been augmenting its DVD-by-mail service by expanding both the number of its digital titles and the number of electronics components that can play them on television. The company’s streaming service is back online after what blog HackingNetflix.com said was an outage that took place at about 7 p.m. Pacific time last night and affected users of Roku set-top boxes and Microsoft Xbox 360 videogame consoles as well as personal computers.

http://www.videobusiness.com/article/CA6675765.html


NFLX closed at $45.80 today. It was at $41.70 when the analyst wrote his article.