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Re: No bottom for Netflix?
No Bottom for Netflix?
by Mike Krumboltz / Movie Talk-Yahoo! Movies
It's going to get worse before it gets better. At least that's one financial analyst's opinion on the future of Netflix.
The once high-flying DVD-and-streaming company has fallen from grace following a summer of price hikes and ill-advised spinoffs. Though the company later abandoned plans to spin off its DVD business (to the relief of many), Netflix stock is still tanking like a Nic Cage movie.
On Wednesday, Michael Pachter of Wedbush Securities downgraded the company's stockfrom "neutral" to "underperform." Pachter also said, "There may be no bottom to the company's 2012 losses." We're not financial wizards, but from what we learned from "Wall Street," investors don't like it when a financial analyst uses words like "underperform" and "broken business model."
Web lookups in Netflix's stock soared on the news. Searches for "nflx stock price" and "netflix stock" more than doubled. Unfortunately, the same can't be said for the actual value of its stock. On Wednesday, the stock fell around 6.5%. Meanwhile, the NASDAQ composite was up more than 3%.
The company is a long way from collapse, but it's worth noting that Web searches for "netflix vs new coke" and "netflix ford edsel" are popular among folks looking to compare the company's self-destruction to other infamous business flops. But whereas Ford and Coca-Cola both came back strong, the jury is still out on whether Netflix can survive its own missteps.
Netflix has said that it would report a loss in 2012. The company is trying to raise $400 million to help offset its subscriber loss and the rising cost of content.
Re: No bottom for Netflix?
What a dumb bastard that guy, the president of Netflix, was.
The market is all about speculation, and he slit his own wrists. Now his company is gonna die.
Yeah man, "go up on your price in a recession" and do it as publicly as you possibly can... BRILLIANT move.
Re: No bottom for Netflix?
I don't get it either. It's still the best deal in town, but I think it was the fact of putting a mark up of such a high percentage, from the original price, in a down economy that put people over.
Remember Cramer, you're dealing with a Napster generation now.
If you don't price it the way the consumer wants... they'll just steal it. There's plenty of places on the internet to download "The Blues Brothers" for free.
- monkeychow
- Rep: 661
Re: No bottom for Netflix?
You guys probably remember that I have strong opinons on copyright...but I think we'll see the same deal as with CDs/MP3 eventually...while people come up with justifications (the record labels are fuckwits etc) the bottom line to me is that people just don't pay for shit they can get for free unless there is a real strong reason to.
That reason could be:
1. It's at a convienant location (eg: I have water out of my tap for $15 and it's like hundreded of litres, but out and about I will buy bottled water for a price that's comparatively insane - like 500ml for $3)
2. Tangable stuff (some people like physical items on a shelf - but this is getting rarer as all our devices go digital (tvs that stream from my pc etc)
3. Connection (sometimes i buy stuff cos i want to support it. Eg Slash's album - could have torrented it - but I want him to make more).
4. It's somehow easier. I can cook nearly for free compared to eating out, but sometimes I can't be fucked cooking.
But the thing is all of these situations are the exceptions to the rule.
The rule is people don't pay for shit they get for free.
Would you still pay for a car if you could duplicate it for free? Would you pay your partner a fee for every kiss? How about an optional air tax?
As the net gets better and better - some of these companies may adapt if they can develop a product that's easier - for example - I would probably sign up for blu-ray quality downloads direct to my home theatre. If the price was insanely cheap, the software was 100% kickass, the download super fast, the quality just as good as a real product, and the title range included everything on earth. As that would be easier than going to a store, or stuffing around with piracy...but it needs to be that easier.
But the shoe is entirely on the foot of the consumer now. The default positon is its free, and it's up to the businesses to justify to the minds of each user why they should bother to pay anything for it.
- tejastech08
- Rep: 194
Re: No bottom for Netflix?
I don't get it either. It's still the best deal in town, but I think it was the fact of putting a mark up of such a high percentage, from the original price, in a down economy that put people over.
Remember Cramer, you're dealing with a Napster generation now.
If you don't price it the way the consumer wants... they'll just steal it. There's plenty of places on the internet to download "The Blues Brothers" for free.
I didn't mind the markup until they decided to spin off the DVD service and force us to rebuild our DVD queue. Fuck that. HUGE blunder attempting to pawn that off on everyone.
Re: No bottom for Netflix?
for example - I would probably sign up for blu-ray quality downloads direct to my home theatre. If the price was insanely cheap, the software was 100% kickass, the download super fast, the quality just as good as a real product, and the title range included everything on earth. As that would be easier than going to a store, or stuffing around with piracy...but it needs to be that easier.
But the shoe is entirely on the foot of the consumer now. The default positon is its free, and it's up to the businesses to justify to the minds of each user why they should bother to pay anything for it.
Maybe because the software engineers who create the technology & filmmakers who make the movies assume they're getting paid for their skill sets & labor, and not doing it so some ham & egger loafing around on his sofa expects them to provide him with the latest & greatest in technology at no cost to himself while he contributes little to nothing.
Re: No bottom for Netflix?
Axlin08 wrote:I don't get it either. It's still the best deal in town, but I think it was the fact of putting a mark up of such a high percentage, from the original price, in a down economy that put people over.
Remember Cramer, you're dealing with a Napster generation now.
If you don't price it the way the consumer wants... they'll just steal it. There's plenty of places on the internet to download "The Blues Brothers" for free.
I didn't mind the markup until they decided to spin off the DVD service and force us to rebuild our DVD queue. Fuck that. HUGE blunder attempting to pawn that off on everyone.
Not sure if it's true, but I heard they were intending on putting the DVD portion up for sale & keeping the streaming only. Not sure if the sale fell thru or the customer backlash was too great they had to retract.
I agree though, it's a great deal. With both streaming & DVD it's getting a little high but heck, cable companies charge $8 just for the boxes anymore. Plus I think the studios & content providers were going to renegotiate their contracts with them and for an obviously much higher rate, to which they needed to raise serious capital. Before Netflix was a little "Hey, look here's a way we can make a little bit even more money". Now it's "You want to make money? Fine. But you pay us more money too."
- monkeychow
- Rep: 661
Re: No bottom for Netflix?
Maybe because the software engineers who create the technology & filmmakers who make the movies assume they're getting paid for their skill sets & labor, and not doing it so some ham & egger loafing around on his sofa expects them to provide him with the latest & greatest in technology at no cost to himself while he contributes little to nothing.
Man I hear ya...my comments are more that I think i'm espousing what I believe the general public thinks.
Myself I buy all original Blu Ray and CDs and support the artists.
Generally, the only stuff I'd torrent is stuff that's not comercially availiable - things like live bootlegs, maybe out of print albums that can't be ordered in australia etc.
It's a real issue. I think if the public keeps demanding all art be free the result will be only hobbists will make art - and thus the standard will have to drop.
Re: No bottom for Netflix?
tejastech08 wrote:Axlin08 wrote:I don't get it either. It's still the best deal in town, but I think it was the fact of putting a mark up of such a high percentage, from the original price, in a down economy that put people over.
Remember Cramer, you're dealing with a Napster generation now.
If you don't price it the way the consumer wants... they'll just steal it. There's plenty of places on the internet to download "The Blues Brothers" for free.
I didn't mind the markup until they decided to spin off the DVD service and force us to rebuild our DVD queue. Fuck that. HUGE blunder attempting to pawn that off on everyone.
Not sure if it's true, but I heard they were intending on putting the DVD portion up for sale & keeping the streaming only. Not sure if the sale fell thru or the customer backlash was too great they had to retract.
I agree though, it's a great deal. With both streaming & DVD it's getting a little high but heck, cable companies charge $8 just for the boxes anymore. Plus I think the studios & content providers were going to renegotiate their contracts with them and for an obviously much higher rate, to which they needed to raise serious capital. Before Netflix was a little "Hey, look here's a way we can make a little bit even more money". Now it's "You want to make money? Fine. But you pay us more money too."
The most basic package on DirecTV these days cost $60 or $65 bucks a month.
That's before the receivers and fees, which usually add $20-25 onto the price, each month.
And for what?
I have a package that is no longer offered by DirecTV, that was a $30 package. Plus insurance and taxes and fees, it's still $50 a month. That's ridiculous with so many internet options.
My future:
I have amassed a DVD collection of films and TV series over the past 10-13 years, that could program an entire TV station of my own, 24 hours a day, 7 days a week, with no reruns.
The DVD's...
Combined with Netflix streaming & DVD in the mail
Plus
Downloads
Plus
Later this week I am buying an antenna, and going old school. Where i'm at I can received 30 channels on antenna alone.
I'm gonna save tons of money in the coming months. TONS.
However, if you count the money that went out for the DVD's over the years... did I really save in the long run? Probably not, but in the short term the cuts will be VAST.
Like I said, DirecTV & Dish Network did not get the memo. They're DONE.
One of my favorite things with DirecTV was the MLB Extra Innings package during the baseball season. Guess what? You can purchase the exact same thing, with more options, full HD, no blackouts on MLB.com, and watch it through your PlayStation 3.
Done deal. I have absolutely no need at all for DirecTV anymore.
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