Netflix scores $1bn own goal after company shoots off mouth A throwaway comment in the Netflix results (PDF) – suggesting that the Olympics will impact everyone's TV watching, including Netflix customers – has the company in PR trouble once again, with deeply suspicious investors, ready to jump at anything. After an innocuous set of results which looked like it had almost done enough to …
Massive horrible coverage. NBC has had a stranglehold on it, just got a huge deal to have it pretty much forever, and universally everyone hates it.
Everything is tape delayed, nobody knows when anything will be on, hope you like swimming and gymnastics (women eat that shit up).
They have a total of 6 channels, the other day those six channels had:
1)Volleyball
2)Football (soccer for us)
3)That same soccer game
4)Basketball (game nobody cared about)
5)That same Basketball game
6)Infomercials
Don't even get us started on how horrible the announcers are.
I can buy that you might not consider the winter games to be as big as the summer games. Winter's a bigger deal here, but that's probably geography dependent.
But are you seriously trying to pretend they don't exist? On a point of pedantry, no less? I can't even begin to wrap my head around all the things wrong with this.
"After an innocuous set of results which looked like it had almost done enough to keep Netflix out of trouble, this comment has now shaved $1.1bn off the share price, taking its value to $3.3bn in a single day."
Who says that B (lower share price) was a result of A (referring to impact of Olympics on Netflixing)? It's not like the Olympics was a secret and that no-one would have predicted that people use Netflix less when there are big events and/or summer on.
"Who says that B (lower share price) was a result of A (referring to impact of Olympics on Netflixing)? "
Given: A - Only an idiot would base buying decisions on something absurd
Given: B - Investors self-select to those who base buying decisions on absurd things
Given: C - The impact of the Olympics is an absurd thing to base an investment decision on
Given: D - The Netflix report mentioned the Olympics
Posited: E - Investors based their decisions based on the Netflix report
Since all investors belong to class A, and since A requires investment in stupid things per B, and via C and D, no explanation is possible other than E.
QED.
Your "Given: B - Investors self-select to those who base buying decisions on absurd things" is itself fallacious, it's the weak link. It's merely a pejorative, cynical swipe at investors rather than an argument per se.
I'm not saying they're all like this, but many investors are using their and/or others' life savings and will often research companies, markets, and products with great diligence to make what they consciously hope is the most rational decision they can make.
You've tried to state that absurdity in making purchasing decisions, is the main irreducible characteristic of investors, and based your argument around your unsupportible contention they're always absurd. As your argument cannot stand, the original commenter's query (which was valid) still stands: how does it follow that the lower share price was the result of the Olympics statement?
Some investors are getting twitchy for the wrong reasons; and that is how the stock market works. People decide to dump stock because they worry that they won't get the dividends that they expected, the price goes down and the sharper investor who has though about it can pick up the shares at a cheaper price. (Then usually sell them back the people that dumped it at a profit).
Unfortunately, the people that dump the stock are often the people manging the pension funds that we will be relying on for our retirments. Oh well, looks like it will be 70 before I can stop working.
"Some investors are getting twitchy for the wrong reasons; and that is how the stock market works. "
What's funny is that, despite that, all of the market models out there assume entirely rational self-motivated behavior on the part of investors.
Hell, even The Economist seems shocked by this revelation, before immediately pretending it never happened and carrying on as before. It's really quite bizarre. "Oh, the models of the most basic possible underpinnings of our entire economic system are utterly and stupidly wrong, and always have been, and it's self-evident? And this makes huge swathes of analyses useless? DISREGARD THAT I SUCK COCKS*" etc etc.
*Search for this on bash.org if you don't get it. It really is relevant.
"by which time Netflix will retain just over 8 million DVD rental customers. Slowly over time these will then shift to online, either with Netflix or with rivals"
DVD customers switch to online with Netflix? I don't see how that is likely. If you are subscribing to Netflix DVD's it's because you want to watch movies, and Netflix online has very few recent mainstream movies now. If you want to switch from watching movies to watching 20 year old BBC series (with poor video and sound quality) then maybe...
Statements like these show me that Netflix is grounded and aware of reality, and know when they will suffer lulls and when they will have booms. Instead of blowing smoke up the investor's nethers, it's kind of refreshing to see a statement like 'yeah our viewership is going to suck this weekend, heard of the olympics?'
to detail and analyse the risks which may impact their future success.
I don't see anything in that pdf which constitutes 'shooting their mouth off'.
If their trading environment spooks investors into selling then that makes them cheaper for other investors who think them an attractive prospect who were previously overvalued.
This is how the market works.
"Perhaps since they're tech journalists they don't have degrees in economics."
One could argue that this means they shouldn't write about economics - or, when faced with a position where economics is central to a tech issue, seek further guidance with someone who -does- know about economics.
Unfortunately, there are no such people.
My problem with Netflix is that there is 'nothing' on. Once you've seen the things that you saw once on TV as a kid and have put a few shows (Cheers, Frasier, Stargate SG1 (sorry)) into the queue as ear-candy whilst you're reading or working (i.e substitute for the radio or whatever) that's it. You're done. I've gone back to buying DVDs on occasion, ripping them to MP4 on a big-ass disk array and playing them through Apple TV with iTunes installed on a virtualized guest on the server. If we ever find ourselves at a loose end and want to watch something recent then Apple TV also provides, but it is a tadge pricey at $5 a film for 24 hours - use sparingly.
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