Mar 19, 2020
Netflix gets asked to chill, but investors are just glad it doesn't have ads Read More Netflixing while stretching and video-conferencing... That Love is Blind episode might be coming in a little fuzzier than usual. Netflix is a leader of the "stay-at-home" stock pack, and we've been doing a preternatural amount of staying-at-home lately. So the EU asked it to stop streaming HD video to "secure internet access for all" — aka, not break the internet:
The EU Commissioner literally called Netflix CEO Reed Hastings to tell him to cut out the HD stuff because it's causing an internet traffic jam. He even started a hashtag for it: #SwitchtoStandard.
At least for the next month, Netflix will reduce its streaming quality in Europe. Because not being able to stream in HD is probably the least of our problems. Plus...
Videos account for a massive bulk of network traffic, like a giant weight on the internet's back. Netflix's HD vids use 3GB of data/hour, as opposed to 1GB/hour for standard def.
Netflix isn't the only one pushing the web's limits... Facebook also had a massive viral-surge in usage for its "family of apps" (Instagram, WhatsApp, Facebook, Messenger) — and it admitted it's being stretched to the limits of its tech infrastructure. Google, which is now offering its enterprise WFH software for free, has been working on increasing its capacity, too.The Takeaway:While media usage is surging, media is not equal... The key difference is in the business model: Google/Facebook/Snapchat rely on ad sales, while Netflix has a subscription-based model (starting at $8.99/month). If the economy hits recession, advertisers are expected to cut back on their ad budgets. That's a threat to ad-based biz models — Netflix's subscription-focus might be more reliable in the long-term. Feb 5, 2020
Disney+ grows to nearly half as big as Netflix... in just 2 months Read More Took Netflix 10 years... to reach the 68M US subscribers it has today. After just 2 months, Disney's almost halfway there with 28.6M. That's the headline from Disney's 4th quarter earnings report. It sounds good, but Disney+ actually hurt Disney's profits badly — those new subscribers drove revenues up 36% overall for Disney, but sank profits by 23%.
Disney+'s 28M: 20% of those Mickey lovers aren't even paying the already low $6.99/month for Disney, they're getting it for free from a Verizon promotion.
And it's expensive: The cast of The Mandalorian and the CGI gal who whipped up Baby Yoda aren't free. The streaming segment (which also includes Hulu and ESPN Plus) lost $693M last quarter (maybe the $7/month isn't enough).
PS: A new series about Obi-Wan Kenobi is being developed for next year.
The Takeaway:Remember Walt's character ecosystem... He drew it on a napkin back in 1957. Unlike HBO, Netflix, Quibi, and NBC's new Peacock streaming service , Disney+ doesn't need to make profits. It can set a low price to maximize the number of people who fall in love with Baby Yoda, then cash in on its other divisions:
Media Networks: The division that's still making bank thanks to cable TV packages is still its profit puppy — it made $1.3B in profit in the last quarter.
Theme parks: 10% more Americans visited its US parks, but this current quarter is expected to feel some pain from coronavirus (an estimated $130B of lost profit).
Merchandise: Lunch boxes, stuffed toys, Frozen dresses — they're all bundled in with the Disney+ division, so we can't say exactly how sales did.
Studio Entertainment: Disney is the undisputed king of movies, and Star Wars Episode IX helped profits triple in that division compared to the year before (a Star Wars-free year). Dec 31, 2019
Netflix's 2019 original content brag (*asterisks included) Read More Here's what $15B gets you... A trophy you give to yourself. Netflix splurged all those billions of investors' cash on 2019's original content — movies/shows produced by Netflix, sprinkled with Jennifer Aniston and Stranger Things. Now Netflix is boasting that its releases this year were more watched than any other studio on the platform.
#1: Adam Sandler and Jen's Murder Mystery won the charts.
American Top 10: All of the 10 most popular new content were Netflix creations, except one: Disney's Incredibles 2.
International flavors: Netflix's The Naked Director led Japan's ranking, while its police drama Sacred Games dominated India's.
Cue the asterisks... (we noticed plenty of them).
Those rankings don't include older content, like reruns of The Office and Friends that dominate your binging habits.
Neflix didn't provide actual viewer numbers to go along with those rankings.
You didn't have to watch the whole thing — just 2 minutes of streaming qualified you as a "viewer." Because, you know, short attention sp-The Takeaway:Netflix's next decade depends on original content... Disney is yanking its magical content from Netflix to sprinkle on Disney+. And top-streamed shows Friends and The Office leave Netflix in 2020 and 2021 for HBO Max and NBC's Peacock (it's rerun-pocalypse). But of all the new releases hitting Netflix chillers' eyeballs, Netflix's homegrown talent is getting the most clicks. Oct 17, 2019
Netflix added almost 7M subscribers last quarter (and is targeting your TV time) Read More 100% of investors should have liked this... Netflix shares surged 10% after releasing its 3rd quarter earnings report. That's better than the previous quarter, when the stock dropped by the same amount. Get a comfy seat on the couch and let's compare:
Q2 (Apr – Jun): 2.7M new subscribers.
Q3 (July – Oct): 6.8M new subscribers.
The reason's in the seasons... CEO Reed Hastings explained away Q2's weakness by blaming the new shows, which were duds. But in Q3, all eyeballs were on Netflix's seasons on seasons of new content.
Bingeable in the USA: "Stranger Things" Season 3 set a Netflix record 64M households tuning in the first 4 weeks after its July launch. And 32M checked out "Unbelievable."
Bingeable abroad: Since 98% of subscriber growth the past 6 months has been international, Netflix invested in non-English hits like "The House of Paper" (about a Spanish heist) and "The Naked Director" (about a Japanese porn director). "Terrace House" is our personal fave. 130 seasons of non-English content hit in 2020.The Takeaway:Netflix is above the streaming wars... A "benchmark" is the standard you compare your performance to (for LeBron, it's Jordan. For Beyoncé, it's Madonna). Netflix prefers to benchmark itself against old-school cable TV.
Netflix has over twice as many paying subscribers (158M) as rival Hulu (76M).
But it gets just 10% as much viewing as old school American TV.
So although it's miles ahead of streaming competition, it's miles behind TV — and it thinks all this streaming competition will just accelerate cord-cutting. Sep 17, 2019
Netflix splurges on Seinfeld to survive the streaming wars Read More But are you master of your domain?... Netflix is. The streamer just treated itself to Seinfeld. All of it — for more than $500M. Netflix rounded up the crew from Tom's Restaurant (close-talkers included) because it needs to replace its top shows that are getting yanked by their owners amid these streaming wars.
The Office (#1 Netflix show): Gone in 2020 — NBC is taking it back to include in its own yet-to-be-named streaming service.
Friends (#2): Gone in 2021 — AT&T is taking it back and adding it to HBO Max.
All Disney movies: Gone by November — Disney is launching competitor Disney+.
FYI: Seinfeld hits Netflix in 2021 (not that there's anything wrong with that) and remains on Hulu (probably with commercials) until then.
'No streaming for you, Sony'... The key here isn't how much Netflix paid (it was more than Friends or The Office recently went for), it's who sold it: Sony. The only companies willing to work with Netflix are the ones without their own streaming platforms. Jerry, George, Elaine, and Kramer aren't too worried — their series has made over $3B since the finale episode.The Takeaway:You're loyal to George Costanza — not Netflix... Streamers are discovering that cord-cutters care most about the shows they'll watch over and over again — aka sitcoms. Netflix lost US subscribers last quarter because its news shows didn't land. Now it's searching for a "loyalty leader" — a show that keeps you hooked to your subscription. It's betting Seinfeld will, yada yada yada, maintain your subscription. Sep 10, 2019
Apple reveals iPhone 11 — then ends its always-raising-prices streak Read More The Touch screen. The no-headphone-jack. Siri... Apple has evolved over the course of its annual new iPhone product unveils. The stage and dark lighting haven't. Here's what we get with the new iPhone 11:
Size and colors: Pastels for days with the new lavender, soft green, and honey yellow. Both the regular and Max versions are slightly bigger than the previous ones.
A "Pro": $999+ gets you three cameras (the starter, a backup, and 3rd-string, just in case), which create quite a bulge. Your move, Pixel 4.
The "Slofie": Sloooow-mooootion videoooo getssss addedddd to the front-facing camera, too.
Forget iPhone — Apple TV+ is the star... and it arrives Nov. 1 at a ridiculously low-priced $4.99/month. Netflix ($12.99), HBO Now ($14.99), and even Disney+ ($6.99 starting in November) aren't happy about this price war aggression. Tim Cook also showed off original Apple TV+ shows (there aren't many of 'em, but they star Steve Carell and Reese Witherspoon) and a $4.99/month video game "Arcade" pass.The Takeaway:Apple's thinking about the whole customer... New colors, a 3rd camera, and the A13 chip aren't forming fanboy lines outside glass-plated Apple Stores anymore. So it's focusing on prices: Lower some prices, offer some freebies, and hope to make $$$ on sales every few years (with monthly service subscriptions in between):
iPhone 11 starts at $699 and the Pro version at $999 (iPhone X started at $999 when it debuted in '17).
Apple Watch 5 is the same price as the previous ones and its Watch 3 is a Fitbit-ish $199.
Apple TV+ costs a Venti Latte per month at $4.99, or free for a year when you buy a Mac, iPhone, or iPad.
Jul 18, 2019
Netflix loses subscribers in the US (we've never seen that before) Read More The MoviePass for living rooms... Netflix announced it only added 2.7M new subscribers last quarter, way below the 5M it expected — That's its biggest miss ever, by far. But this stat was the most shocking: In the US, Netflix actually lost 300K subscribers (it was hoping to gain 200K). America is post-peak Netflix.
2 key problems drove the disappointment... And neither was Friends or The Office, the two most popular Netflix shows that'll get pulled in 2020 and 2021, respectively.
The price increase: Last quarter, the price of a standard account rose from $11 to $13.
The un-inspiring content: Netflix execs said the "content slate" didn't drive as many users to sign up. Meanwhile, Big Little Lies, GoT, and Chernobyl won eyeballs at HBO. But don't worry — CEO Reed Hastings predicts that Stranger Things 3, The Crown, and Orange Is the New Black's final season will drive 7M new subscribers in the 3rd quarter.The Takeaway:It's harder to win new customers than keep existing ones... Netflix will have to spend $22B annually by 2024 on original, new content, according to JP Morgan, to keep winning new users. It spent big last quarter, but money doesn't always buy great content. Jun 21, 2019
Netflix's Sandler/Aniston flick reveals some valuable numbers and intel Read More Less chill... Netflix whipped up a new comedy over the weekend featuring Adam Sandler and Jennifer Aniston — Murder Mystery was Netflix's biggest opening weekend original movie yet. Critics didn't love the story, but we loved the numbers Netflix revealed (it rarely shares info like this). Here are the personal records Netflix set:
30,869,863 viewers in 3 days.
That was 10% of all Netflix views.
Over half were from outside the US (FYI - getting through 70% of the movie counts as a "watch").
Pressure is on... Netflix is showing off its latest win because everyone's jumping on the streaming couch. Amazon, Hulu, Comcast, and AT&T’s HBO — They're all pushing streaming options as you cut the cord. And Disney's pulling its own magical content from Netflix as it launches its own Disney+ in November.
The Takeaway:Netflix's homescreen is the most valuable billboard ever... As it jumps deeper into original content, it's also jumping into competition with Lionsgate, 20th Century Fox, and other movie producers. Netflix's new competitive advantage is that it owns its whole ecosystem. Instead of paying for ads and buying trailer spots, it just sticks Murder Mystery at the top of your screen — its homepage — to ease your viewing decision stress. 
