Is Netflix going to die in the next year?

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I wouldn't count Netflix out.

They still are the leader in streaming/mail services and are installed in a variety of devices.

Tech stock analysts/investors are very fickle. When Apple announced the 4S and then Jobs died the next day, AAPL dropped to $375, then when pre-order figures were published a week later, it jumped to $420... then they reported lower than expected earnings, back to $390s and now it's hovering around $400.

At $77, this is the lowest NFLX has been in over a year... and for some that may signal a buy... but we'll see... this drop is huge but it's seems to also be fueled by the typical sell-off panic of a previously hot stock. If you want to hedge, you may want to look at Coinstar (CSTR), they own Redbox and their stock seems to oppose NFLX when it comes to drastic changes in stock prices (but I warn you... I'm only Warren Buffet on the Internet).

Personally, we love Netflix. That's why the price change meant nothing to us. Considering how much we pay for cable and how much we use Netflix, it's a bargain. And we can't get cable in the car or at a restaurant. Plus... if you've noticed... there are no more Blockbusters in Irvine.
 
I'm wondering how Netflix will convince subscribers to pay for the higher cost that is being imposed on them by the content providers.  If the studios are demanding more for their libraries, Netflix needs to somehow generate more revenue or pass on the costs.  Subscribers aren't liking the increased subscriber fees.
 
i canceled netflix about a year or two ago.  When Cox started offering movies on demand is when i canceled netflix. with netflix i would get the movies and they would sit next to the TV for weeks or even months, so we would actually lose money.  We have subsequently switched to direct tv, now we can buy a movie in the living room and if we start falling asleep we can continue it in the bedroom (we only have one dvd player in the living room). I think cox offers the home networking now as well.  But the ON demand capabilities of the cable/satellite providers is what caused us to pull the plug on netflix. there was also a waiting list on occasion for the good movies and i hated that.
 
irvinehomeowner said:
@qwerty:

Did you ever use the streaming? I haven't watched a Netflix DVD in like 8 months.
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I did on my computer, not on the TV (dont have a netflix enabled dvd/tv).  The quality was good and the streaming was fine, the problem was the selection. If they had a better selection i would reconsider joining but until that happens ill just stick with on demand.
 
Hmm... has the freefall stopped? Seems to be holding at around $80.

In other news, RedBox is upping their DVD rental to $1.20 from $1.00... maybe you should hold off on CSTR.  :-X
 
irvinehomeowner said:
Hmm... has the freefall stopped? Seems to be holding at around $80.

In other news, RedBox is upping their DVD rental to $1.20 from $1.00... maybe you should hold off on CSTR.  :-X
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I sold 10 weekly $90 NFLX call options this week right after earnings to make a few bucks.  I'm gonna cash out tomorrow so my funds are all in cash ready for my home purchase.  ;)
 
So how will Netflix retain/gain more subscribers without infuriating them by upping subscription fees?  They've got to somehow pay for the increased content costs.  Just being a leader in your business doesn't equate to being profitable.
 
From what I've read, the DVD mailing portion is very costly, by charging for that separately already increases revenue for them. Streaming costs can scale down more easily than DVD distribution (postal rates usually go up not down) and that is probably very profitable for them because storage prices, servers etc get cheaper over time.

The problem is they will have to face increasing competition from media companies that want to do their own streaming for their content and cable companies are getting smarter about providing on-demand content as part of their service.

What we may see is more partnerships with media companies that will tap Netflix as their streaming partner rather than try to develop their own service... but I don't know if we'll ever see NFLX hit over $300 again.
 
It'll be interesting also to see how well the non-studios fare as they try to create original content.  I know Youtube and Netflix is trying to create original content.
 
irvinehomeowner said:
USCTrojanCPA said:
They arent going out of business but the stock is going to $40.
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It's at $90 now... is it going back up or down?
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It'll get back to $40 within the next few years.  Can it get over $100 in the near term, sure why not.  This is a Momo stock which lost it's mojo.  Bad quarters come in bunches and it's not like they are in a market that google, apple, dishnetwork, amazon, etc can't get into.  That's not even taking into consideration the cost of content going higher and higher....you don't think those movie studios want a piece of that fat margin netflix has been making?  This is an overvalued company and I wouldn't own it with TIC's money.  I made my money on selling the calls last month but so you know I sold some $75 NOV puts for this month....gotta change things up sometimes as things don't just go in straight lines, either up or down.  ;)

I'll give you and all the other armchair investors out there any one of my Nov plays....buy out-of-the-money VIX calls (like 35-40) and sell 5-10x more higher higher VIX calls (50+) along with out-of-the-money SPY puts.  If the market stays flat you'll collect a good bit of option premium, if we get a mild sell-off you can make a nice return, and if we hit the crapper he'll have enoguh protection to not lose much at all.
 
irvinehomeowner said:
Relax... all I needed was the first part... you didn't have to go all VIXy on me... I'm not Graph.  :P
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Just trying to give you a trade...not super risky but you will have to watch it untl the VIX expires next Wednesday.  :D
 
USCTrojanCPA said:
This is a Momo stock which lost it's mojo. 
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What's amazing to me is that management was the sole cause of this loss of mojo.  The monumental drop in subscribers was in direct response to their actions.  Had management done nothing or introduced the price increases more gradually, we wouldn't even be having a conversation. 

As if upsetting the streaming customers wasn't enough, Netflix decided to introduce Qwikster to make sure 100% of their customers were not happy.  Seriously, who manages a company this way?  The CEO destroyed billions in value and should be fired immediately.

Are there any other companies that have gone from the darlings of Wallstreet to talk of failure, within a matter of 2 months as the result of nothing more than poor management execution?
 
What they should have done is keep it the same price (or actually discount it a bit) if you go streaming only or DVD only.

If you want both, instead of twice as much it would be a small upcharge like $2-$3 (like they do when you add BluRay).

After doing things right for such a long time (they were able to kill Blockbuster and Blockbuster even had local stores to compete), this misstep was huge.
 
Netflix making new lows in after hours trading, now at $69.  See you in the $40s (I thought in 2012 but it could very well happen this year at this rate).  LOOK OUT BELOW!
 
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