This is a stock and company that seems to regularly come up in the Trading thread and chat room -- thought it was deserving of its own thread similar other popular tech stock like Apple, Tesla, FB, etc.

Amazon the chief threat/competitor to them long term in the streamin/OOT space, or a traditional media company like TWX or VIAB coming up with their own OTT offering or spinning off HBO?

Recent NY Times article - http://www.nytimes.com/2016/01/14/te...flix.html?_r=0

Anyone long them currently, if so why?

You too can get it on the ground floor of a content distributor/creator with a price earnings ratio north of 280.

How are the current distributors looking? Directv, Dish. Content creators? Disney, Time Warner. Looking not so good. Momo plays are fun until they blow up.

wouldn't this same argument have been made last year?

The same argument could also be applied to tech stocks before 2000.

Alcatel Lucent had a grand ol' business plan before it imploded and fundamentals wrought. Jim Cramer's winners of the new world speech had a decent set of examples. Yahoo too.

I used the other content companies as an example because none of them have a P/E ratio of 280.

Total Streaming Revenue for Q4 2015 is $1.672 Billion, up from 1.581 Billion Q3. and reaching 70 million paid memberships worldwide.

Revenues of around 6 billion a year for a company worth around 50. Where can I get in on this sign me up ASAP

Not to mention cost of marketing and creating their own material will also likely go up given all the new players entering the fray.

All I know is that I pay $8 a month for a service I would easily pay $15-$20 for and still be very happy with. With increased competition they likely won't be raising their prices immediately, but I just can't imagine they won't relatively soon and with little fuss if it's just a few bucks.

stock was at 130 in December now at 96.

with house of cards back soon its flagship show and good earnings can we expect this to bump

You mean in three month's time? We had earnings on the 20th January.

Earnings were good by any estimation. They sold off 10% in a flat market. And they're still horrendously overpriced.

Amazon growth should present an ugly picture for NFLX (earnings Thursday). 54m Prime members in the US. Bidding for key shows, which both increases costs and steals members.

fwiw I just did some fun top down assumptions on netflix (ala bronte capital) and get fair value today at 47$ per share.

500mm homes addressable market in 10 years time. lets say netflix gets half of those or 250mm homes. That also represents about 600mm ppl so were talking about 8% of entire worlds population subscribing to netflix.

They up their prices over time closer to true value of $15 per month. This means 45 billion per year in revenue. Solid margins for a media company are 25% ebitda. Being a low capex business once they are built out they can probably trade for 10x ebitda. Gets us to 112 billion market cap.

Discount this at 10 years to reach it at 10% required return per year means marketcap today or 43 billion. clearly the odds of them achieving this global domination is not 100% so handicap it. 50% odds? close to 46$ a share today.

Bascially what im trying to point out is current share price is implying 100% chance of achieving world domination, and should they do it you'll get your 10% return per year for the next ten years., but no more. Really not much upside at this price.

this is equivalent to writing I called because if I hit my flush on the river on a 4 flushed board hell pay me off with two pair.

Everybody knows what you wrote, it was priced in forever ago. Like arguing to buy snow shovels in September for the winter bump.

thanks for the post Ahnuld -- so many people on here have been shorting or had bear cases for them was curious what exactly the longs are seeing beyond just total world domination and destructing of cable/traditional tv etc.

Couldn't their margins become a lot better than a traditional media company if they are able to spread their content costs over so many more subscribers ?

If HBO got spun off as their own eventual OSS company, Apple and Google enter the original content in terms of feature films/tv series etc...isn't that going to just create an increase in the costs of content that would offset their increasing subscribers?

Yes. Unless rumors are true that AAPL is looking to acquire NFLX (although I haven't thought through exactly what that would do).

The prices they are paying on the theatrical side at festivals etc are ridiculous and cannot possibly be giving them a positive ROI.

Can't believe how easy it is for me to use my friends log in
I would pay

Shouldn't they just make each device have its own subscription ?

Stock up $130 in two years since the thread was created, safe to say the future is now. When will profitability/content spend matter to the price? Definitely the most expensive of the so called "FANG" stocks by most traditional methods. They also have benefited from the perfect market environment.

I have it at 87! Please to be signing up, everyone, tia.

All I know is they raised rates again, and if I wasn't splitting a monthly 3 ways, I would cancel.

You'll have it at 87 again if you don't sell and take your 200%

Does anyone have any insight into what the movie Bright actually being a profitable play for NFLX means for the content creation business?

I'm starting to have a sneaking suspicion that the best way to be long NFLX is to be short theater chains.

EDIT: Because a lot hinges on whether or not Bright is a profitable play. If Netflix can spend 100M+ on a movie and have it make sense in terms of subscribers gained/retained I think the theater game just had the last nail put in the coffin. Really bad for people who sell traditional TV ads too.

I don't like theater chains because nowadays everyone pretty much has an excellent home theater setup of there own. And those that don't probably don't have the money to go to the movies anyway.

As people unplug the cable companies and networks are the ones who will lose out to Netflix although it is muddled since they are still the internet providers. Comcast, AT&T etc. will lose by people cutting the cable portion but will be in position since they are still providing the internet service.

In the future I see people with a bundle of bundles (Netflix, Hulu, Amazon, the new Disney thing coming etc.) All of these things can co-exist and betting against one (like Netflix) because of this competition is foolish. NFLX is king of the hill right now and I expect will remain so. I believe they all can and will co-exist, survive and thrive.

Yeah it's just that the revenue model for content creation is changing from one time fees to monthly subscriptions. You've seen it happen completely in music as well. The moment it makes sense to make big budget movies on subscription movie theaters are stick-a-fork-in-them done.

I can't think of a single reason I would go to a movie theater. The last movie I saw in the theater was the first new star wars movie and I regret it. There's at least a 50% chance I never enter a theater again.

EDIT: Seriously spending 50 bucks on concessions and tickets for two people so that you can sit on chairs that are less comfortable than the ones you have at home, so that you can watch a movie on a bigger screen, is super stupid. Particularly for people who have a nice movie viewing setup like I do.

I'll consider a bet. What price?

To add to your guys discussion re: movie theaters, while sales were basically flat in 2017, attendance hit a 25 year low. I think its not a coincidence that we've seen sub growth far outpace expectations when you have the value proposition of going to the theaters diminishing. Granted so much of the box office and Netflix success is the content itself, but still a couple generations now are being raised on streaming. It will have longer term effects in how they spend their dollars to view other entertainment.