When It Rains, You Watch Netflix

When it rains it pours, I suppose. Just about the last thing US tech shares (and equities more generally) needed at a time when all things "Growth" are under siege from rising real rates was a big miss on a key metric from a big name. Enter Netflix. The figure (below) tells several stories simultaneously. The company's guidance for paid net adds in the current quarter was a bitter disappointment. The Street expected 6.3 million. Netflix sees 2.5 million. That's a big miss, to put it nicely. If

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8 thoughts on “When It Rains, You Watch Netflix

    1. Perhaps like the growth of Disney+ in India? Where the monthly fee is something like $2.50. Hardly enough to cover the $15 billion a year to develop new content.

      It is starting to look like a deep content library is no longer enough. US consumers want new stuff! That’s expensive.

    2. They’re still below 225M worldwide and 80M in the USA? Your experience might just speak to the fact that you’re urban upper middle class at least?

      Obviously CAC is a thing and getting the rest of the world on the platform is going to be more difficult, though I still think that there’s a lot of cord cutting to come… (80M remaining cable subscribers in the US alone, iirc)

  1. I think some of that lower growth might have been a consequence of COVID accelerating subscriptions for a year or year and half.

    But competition is probably a factor too. Though I disagree that Disney has a super deep portfolio (at least in France, it’s really Marvel, Star Wars and the classic cartoons. It’s good stuff but you can saturate. SW classics are great, recent stuff is… between garbage (the new trilogy) and decent (baby Yoda etc). MCU is awesome (imho) but that’s a handful of films. Disney cartoons are generally great but it’s 1 a year so let’s call it 25 movies I most likely already seen before at most). It’s highly differentiated, though and the cost is perfectly acceptable for a middle class family. Amazon is definitely deeper but not really a choice as it’s included in Prime. If they introduce more tiers, that’d be a different story.

    Apple has 3 shows. I like Foundation but am wondering if I ought to keep paying $5 or $6 a month just out of laziness/to see what else they bring.

    FWIW, I think the real problem with Netflix is too much choice, with too much being mediocre. Tastes and differences in tastes are hard but I wish they had better tools to curate their offerings.

    It’s become a joke – a comedian made the crowd laugh describing how he spent 40 minutes selecting for shows and movies rather than actually watching any of it.

    I’ve had the same issue. Tik Tok is a totally different format but it really crushes that problem/makes it irrelevant and is therefore the biggest thing to happen in the last 2-3 years.

  2. I would rather rewatch a movie I know I like- than sit through another mediocre, at best, show or movie.
    I like my “library” of films I have purchased through Apple. I have Netflix but hardly ever watch it. My kids have my user name/password but I don’t think they use it either. This is a good reminder that I should cancel.

    1. I would rather rewatch a movie I know I like

      So I certainly do that – but I also feel bad about doing it. There IS great new content out there (and we are missing out by rewatching familiar stuff instead). It just doesn’t get surfaced very well.

  3. I also believe that HBO Max’s content is far superior than Netflix, and that both Disney and HBO subscribers are more likely to maintain their subscriptions over time…then again I’m in the over 55+ demographic…

    Thanks for the Candyland and Queen Frostine reference … I would add that competition in the streaming industry has now gotten very “Gloppy.”

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