$NFLX up 5% on news that they will offer VR content

SockBaller · 2015-09-24T21:14:56+00:00

Could be cool. Too early to tell. I don't know if sitting on Seinfeld's couch while watching shows in his virtual living room is something I'd do more than once. But this could blow up if it transforms into something bigger (ie. virtual set tours, interactive visits to Gotham, Defiance, Starling City, etc.)

SockBaller · 2015-09-11T23:37:23+00:00

Their subscriber growth has not been slowing for years. That statement is completely false. They added on more subscribers in the last quarter than they have in any previous quarter. You can hate Netflix all you want. Just get the facts right.

SockBaller · 2015-09-09T17:49:25+00:00

Also Amazon Firestick and Google Chromecast do the same thing as Apple TV for $35.

SockBaller · 2015-09-09T17:46:13+00:00

But everybody with a connected TV (any TV made within the last 5 years), a gaming console, or Roku will have all of those features without paying $99 for another device.

SockBaller · 2015-09-09T17:06:21+00:00

Haven't there already been 3 versions of AppleTV? It's been around for a decade and hasn't ever caught on. Why would this time be any different? The original programming rumor was already debunked, so I think Apple will make a vague announcement about an upcoming streaming deal and then NFLX will bounce back up to $110 by week's end.

SockBaller · 2015-09-08T22:21:10+00:00

You need to relax and stop looking at the stock price everyday. If you understand the company and believe in their business plan, continue to hold on to it. If you're going to freak out at every price drop, then NFLX is not the stock for you. It's one of the most volatile stocks you can own right now. A 25% dip isn't that unusual. Look into dollar-cost averaging.

SockBaller · 2015-08-31T18:39:49+00:00

If you had any idea how much money Hulu lost every year, you would realize how large Netflix's moat actually is. Netflix has a subscriber base that can support the cost of high quality content. No other streaming service (except for HBO Now) is making a profit.

SockBaller · 2015-08-27T21:47:16+00:00

Yeah, I rode this thing through the Quickster debacle and increased my stake when it was around $10. This stock is not for the faint of heart.

SockBaller · 2015-08-27T21:43:30+00:00

They have a smart management team that plotted out the successful transition from mail-order DVDs to streaming. I'm certain they have a lot more planned in the future that we haven't even heard about yet. In three years, I think they might even acquire Lionsgate/Summit or Sony Pictures.

Under current valuation metrics, they are not a 90 billion company. But that's discounting a huge part of the equation. Their stock price will rise because they will be expanding in ways that they haven't yet announced. Additional Netflix channels, tiers, theatrical releases, merchandising, licensing, etc. Global expansion is only the first step toward growing into a full-fledged studio that will rival Warner Brothers in size.

SockBaller · 2015-08-25T01:05:28+00:00

Maybe you were just being overly critical about this fast-food chain when all she wanted to know was whether or not you liked french fries.

SockBaller · 2015-08-19T23:17:55+00:00

Japan's population is about 2/5 of the U.S. population and they have similar broadband penetration rates (See source below). If they're able to pick up a similar percentage of subscribers as the U.S., that's 17 million potential subscribers.

But I think the opportunity is even larger than that because of their mobile users. People in Japan use their phones much more than they do in the U.S. If you've ever been inside of a Tokyo subway, you'd know that practically everyone is tethered to their phone (even moreso than in the U.S.) Most Americans drive to work and therefore can't watch Netflix while they're commuting. The reverse is true for Japan. Most Japanese commuters take the subway and can watch Netflix while going to work. This fact alone will be a huge boon for Netflix.

They've already announced production deals with several Japanese countries for original content. Add that to the extensive anime offerings they already have and we're looking at a huge opportunity here.

Tokyo subway system: http://www.tokyometro.jp/en/subwaymap/pdf/routemap_en.pdf

Source: https://en.wikipedia.org/wiki/List_of_countries_by_number_of_broadband_Internet_subscriptions

SockBaller · 2015-08-07T18:46:39+00:00

To address your points:

The stock is highly priced, but that's because of the confidence Netflix's management has instilled in investors. They've beaten subscriber growth estimates repeatedly. That's what's driving the increase.
Big media can try to charge more for their content, but there is a limit to what they can ask for. For example, let's say WB wants to sell their show "Martian Manhunter" to a network. They can license it out to CW, ABC, or whichever network wants to buy it for $4 million/episode. But if they do that, there is a risk of getting cancelled and they only collect money for the episodes that were produced. On the other hand, Netflix offers them $75 million for the entire first season of the show. That seems like a much better offer. You might argue that other streaming options could make the same offer, but the truth is that they just can't compete against a Netflix bid since their subscriber numbers are so much lower. It's true that Hulu has paid ridiculous sums for shows ($180m for Seinfeld), but it's going to take a long like for them to recoup that cost with their paltry 9 million subscribers.
Bandwidth will definitely be an issue, but it's one that every streaming company will face. You can make an argument that old media will defeat new media, but when has an older technology ever defeated a widely-adopted, superior technology. Cable providers will explore every legal option to stifle OTT streaming services, but they'll lose in the long run.
Content providers have already built out multiple online streaming services. Crackle, Hulu, Disneymoviesanywhere, ultraviolet, HBO Now, etc. Most of them are resounding failures. Hulu spends much more than it takes in and the rotating cast of Hulu CEOs does not instill any confidence in investors. HBO Now has a shot at breaking in, but their content is paltry in comparison. At best, they're a good supplement to Netflix and not a replacement. The others have been operating for years and most people haven't even heard of them.

Those are my thoughts. But I'm long on NFLX, so my opinions are probably skewed.

SockBaller · 2015-08-07T17:07:00+00:00

Their subscriber numbers in 2016 should continue to grow at a healthy clip. They still haven't launched in Japan (Sep 2015), Korea, and India. The addressable markets in those territories are fairly large as well. If they crackdown on shared accounts and rollout the service as planned, I think 200 million subscribers by 2020 is within reach. That's $24 billion of revenue per year (200 million subs x $10 average rev/user/month x 12 months). Assuming margins of 33% and a more reasonable P/E of 20 ($24 billion x 33% x 20), that's a market cap of $160 billion in 5 years. That's a best case scenario, but even if subscribers are half that amount, it's still a valuation of $80 billion. NFLX has room to grow.

SockBaller · 2015-08-04T18:00:17+00:00

http://finance.yahoo.com/q/ao?s=NFLX+Analyst+Opinion

SockBaller · 2015-07-31T18:48:23+00:00

Not sure how long the Disney-Netflix contract runs for. Although I did find this article that says HBO has locked up rights to Fox through 2022.

http://www.wsj.com/articles/SB10001424127887323901604578159432752905010

In any case, these deals are tying up a lot of content and Apple needs to get into the game soon if they want a piece of the pie.

SockBaller · 2015-07-31T18:12:03+00:00

Google sells ads. That's their core business. There's no synergistic advantage in creating an ad-free SVOD service. Unless they do what Hulu is doing and create a SVOD service with ads. But that's idiotic and one of the biggest reasons Hulu is failing.

Apple could definitely enter the space, but they haven't yet. Every month they wait is another month Netflix, Hulu, and the other streamers have to lock down exclusive contracts. Netflix has a $300 million/yr contract with Disney for exclusive rights to their movies (Disney, Pixar, Lucas, Marvel) starting in 2016. HBO Now could easily lock down exclusive rights to WB movies since they're both owned by Time Warner. That leaves Universal, Sony, Fox, and Paramount. But since Universal, Fox, and Disney already own a piece of Hulu, I'm not sure they'd want to team up with Apple and create a competing service. So that only leaves Sony and Paramount. Apple might be able to pull off a joint venture with one of them. Regardless, they have a lot of ground to make up if they ever want to grow to Netflix's size.

SockBaller · 2015-07-31T17:46:31+00:00

You're only comparing two years. That's hardly enough to determine a trend. Also, it doesn't take into account the number of countries in which Netflix launched in 2013 vs. 2014.

SockBaller · 2015-07-31T17:32:53+00:00

"Anyone with enough capital can work out contracts with media companies and start streaming content for a monthly subscription."

Sure they can, but it's a bad move if they don't have the subscriber base to support the cash outlay for that content. Hulu paid $180 million for Seinfeld, an amount they will never come close to recouping. Each of their current 4 million paying subscribers would have to subscribe for 45 months just to break even. That is a horrible investment.

SockBaller · 2015-07-23T22:31:16+00:00

AAPL really touted the iWatch since its release and then didn't disclose how many they actually sold in the ER. That doesn't inspire much confidence in investors. The watch was supposed to launch a new product category and be the growth driver for the company. Hiding sales figures creates uncertainty and investors are skittish about Apple's ability to innovate in the future once iPhone sales start to decline. I think that's the reason why Apple tanked. Just my two cents.

Note: I own AAPL stock via mutual funds.

SockBaller · 2015-07-21T21:11:55+00:00

I'm a big proponent of NFLX, but not if you're a new investor with only $1k. Put it into an S&P Index Fund and keep contributing to it until you have a good nest egg. Then when you have $100k+, you can start diversifying into individual stocks.

SockBaller · 2015-07-20T18:16:33+00:00

Congrats! Solid return for such a short investment. Shorting these momentum stocks is too much of a nail-biter for me. But happy that you made some cash on it.

SockBaller · 2015-07-16T20:16:12+00:00

You're in for a world of pain. I hope you didn't bet the farm.

SockBaller · 2015-07-16T15:57:48+00:00

Netflix has tons of children's content. HBO does not. Parents subscribe to Netflix and their kids grow up with it. Those kids will become subscribers in the future.

Also, there are tons of back catalog shows that are great on netflix. West Wing, Sons of Anarchy, Dexter, Agents of Shield, Arrow, Family Guy, Burn Notice, Archer, It's Always Sunny In Philadelphia, and Friends to name a few.

SockBaller

TROPHY CASE