Netflix stock down 40%

[TreeTops]

Their stock plunges 40% since they announced price increase. Shareholders have lost $6 Billion in paper losses. Are we seeing the end of Netflix?

Source: Register Guard (Sep 16, 2011)

[jagabo]

Are we seeing the end of Netflix?

Hardly. Did you notice that their earning guidance hasn't changed? In other words, every dollar they lose from people defecting is being made up by the higher rates they're now charging. It looks like they made the right decision from their point of view.

[mrswla]

I hope so. Greedy bastards! I stopped my sub when they hiked their prices. They were already making a killing at their previous prices.

26% is the last two days alone. http://latimesblogs.latimes.com/entertainmentnewsbuzz/2011/09/netflix-stock-drops-anot...le+Feedfetcher

[lordsmurf]

They were already making a killing at their previous prices.

People like to say this ... but I don't know that I can agree. Postal rates have gone up, licensing had changed on them (Starz incident), and bandwidth costs have averaged for a while now. The steady increase in customers pulled on expenses, and that would have more likely killed Netflix than anything else.

notice that their earning guidance hasn't changed? In other words, every dollar they lose from people defecting is being made up by the higher rates they're now charging. It looks like they made the right decision from their point of view.

Yep. At some point, the trend will reverse, when people pull their head out of their ass and realize the price point was extremely reasonable. They can't find a better deal from Red Box, Blockbuster, Dish Online, or Hulu. It's $8 to stream all your want, or $8 to rent probably 6-8 DVDs per month.

....

Most anti-Netflix news is, and always has been, the tantrums of the stupid. (And I say this, not being a current customer of Netflix. So I can't be accused of being a pro-Netflix fanboy.)

[CliveJ]

It's $8 for streaming PLUS another $8 for one DVD out at a time. Streaming is for limited titles and new releases take forever to get on DVD. Netflix stock down 40% is a lot. I can see why. $16 plus tax a month for access to their catalog is a bit steep. Hope they make it. Their streaming business could disappear with the right competitor. Sounds like Wall Street sees them being muscled out of business.

[mrswla]

They were already making a killing at their previous prices.

People like to say this ... but I don't know that I can agree. Postal rates have gone up, licensing had changed on them (Starz incident), and bandwidth costs have averaged for a while now. The steady increase in customers pulled on expenses, and that would have more likely killed Netflix than anything else.

If the CEO has his pay double in the past year, then yes they are making a killing. http://www.alaskadispatch.com/article/netflix-stock-plunges-after-price-restructuring

Yep. At some point, the trend will reverse, when people pull their head out of their ass and realize the price point was extremely reasonable. They can't find a better deal from Red Box, Blockbuster, Dish Online, or Hulu. It's $8 to stream all your want, or $8 to rent probably 6-8 DVDs per month.

I have a blockbuster membership for $20 a month and receive 3 by mail with unlimited in-store return/rentals. I average 20-24 rentals a month. That is a hell of a lot better than $18 for netflix's 1 at a time with streaming (streaming of crap that I don't want to watch)! I just couldn't justify giving netflix that much money every month, so I cancelled.

[budwzr]

Let's not forget that the USD has slipped 25% since the recession, so $8 today is equal to $6 a couple years ago. It has to do with the consumer price index, not greediness or going kapoop.

If the stock is slipping 40%, that's because Dish Network is trying to make a move using the Blockbuster branding, and some investors got rattled.

[jagabo]

Let's not forget that the USD has slipped 25% since the recession, so $8 today is equal to $6 a couple years ago. It has to do with the consumer price index, not greediness or going kapoop.

Netflix increased their prices by something like 20 percent earlier this year too.

[budwzr]

I have a blockbuster membership for $20 a month and receive 3 by mail with unlimited in-store return/rentals. I average 20-24 rentals a month. That is a hell of a lot better than $18 for netflix's 1 at a time with streaming (streaming of crap that I don't want to watch)! I just couldn't justify giving netflix that much money every month, so I cancelled.

Hey, that's great and you get a little exercise now too.

So let's see, BB ends up making $1 or so per rental? That's the same price as RedBox, but there's no membership. No pressure to keep slogging down there, to "get your money's worth". RB is ala carte. You don't rent, you don't pay.

[budwzr]

Let's not forget that the USD has slipped 25% since the recession, so $8 today is equal to $6 a couple years ago. It has to do with the consumer price index, not greediness or going kapoop.

Netflix increased their prices by something like 20 percent earlier this year too.

20% sounds like a lot, but...

On $100, 20% is $20. A noticeable difference.

On $8, what is 20%?

[mrswla]

Let's not forget that the USD has slipped 25% since the recession, so $8 today is equal to $6 a couple years ago. It has to do with the consumer price index, not greediness or going kapoop.

If that were the root cause then my subscription would have went up by $3 (25%), not $6 (50%). Anybody check out Netflix's financials? It's is the billions. With an operating cost in the millions, they're still rolling in the dough!

So let's see, BB ends up making $1 or so per rental? That's the same price as RedBox, but there's no membership. No pressure to keep slogging down there, to "get your money's worth". RB is ala carte. You don't rent, you don't pay.

But you have to remember to return within 24hrs or you get charged another $1 for everyday it's not returned. Also they don't have the selection blockbuster has.

[mrswla]

On $8, what is 20%?

$1.60 But if they keep doing that every 6 months, it adds up real quick!

[mrswla]

So let's see, BB ends up making $1 or so per rental? That's the same price as RedBox, but there's no membership. No pressure to keep slogging down there, to "get your money's worth". RB is ala carte. You don't rent, you don't pay.

Oh something I forgot to mention, my bb plan includes blu-rays. So actually if I rented from redbox that would be $30+ dollars a month for the same amount of rentals.

[budwzr]

On $8, what is 20%?

$1.60 But if they keep doing that every 6 months, it adds up real quick!

I think even $15 is cheap.

Anyway, this whole brouhaha is because Hollywood wants to squash cheap movie outlets for consumers, and that's anti-trust, and they're going to end up standing in front of nine judges eventually, and we'll finally have our cake and eat it too.

[edDV]

I have a blockbuster membership for $20 a month and receive 3 by mail with unlimited in-store return/rentals. I average 20-24 rentals a month. That is a hell of a lot better than $18 for netflix's 1 at a time with streaming (streaming of crap that I don't want to watch)! I just couldn't justify giving netflix that much money every month, so I cancelled.

Hey, that's great and you get a little exercise now too.

So let's see, BB ends up making $1 or so per rental? That's the same price as RedBox, but there's no membership. No pressure to keep slogging down there, to "get your money's worth". RB is ala carte. You don't rent, you don't pay.

But if you miss the return deadline at Redbox, you pay another $1.

I like Netflix for the large selection. Redbox is extremely limited.

[mrswla]

Anyway, this whole brouhaha is because Hollywood wants to squash cheap movie outlets for consumers, and that's anti-trust, and they're going to end up standing in front of nine judges eventually, and we'll finally have our cake and eat it too.

I'll agree to that! That's why I refuse to go to the movies. I'm not spending $12 per ticket to see some movie that will be out on blu-ray/dvd in 4 months (tops) that I can rent for a buck!

[mrswla]

But if you miss the return deadline, you pay another $1.

Are you referring to bb?? There are no due dates if you have a mail membership. You can return the rental anytime you like.

[mrswla]

Sorry edDV, strike that last comment.

[budwzr]

Anyway, this whole brouhaha is because Hollywood wants to squash cheap movie outlets for consumers, and that's anti-trust, and they're going to end up standing in front of nine judges eventually, and we'll finally have our cake and eat it too.

I'll agree to that! That's why I refuse to go to the movies. I'm not spending $12 per ticket to see some movie that will be out on blu-ray/dvd in 4 months (tops) that I can rent for a buck!

Hahaha, the downside is that once Hollywood gets whacked by the Supreme Court, there's definitely going to be some cheezy low budget movies coming out.

No more "Ben Hur's", hahaha.

Futurecast 2020: "Herbie has a Hernia" goes five-dee and becomes an epic.

[jagabo]

Let's not forget that the USD has slipped 25% since the recession, so $8 today is equal to $6 a couple years ago. It has to do with the consumer price index, not greediness or going kapoop.

Netflix increased their prices by something like 20 percent earlier this year too.

20% sounds like a lot, but...

On $100, 20% is $20. A noticeable difference.

On $8, what is 20%?

The point was that CPI and shipping cost increases were already covered.

[Tearren]

They were already making a killing at their previous prices.

People like to say this ... but I don't know that I can agree. Postal rates have gone up, licensing had changed on them (Starz incident), and bandwidth costs have averaged for a while now. The steady increase in customers pulled on expenses, and that would have more likely killed Netflix than anything else.

If the CEO has his pay double in the past year, then yes they are making a killing. http://www.alaskadispatch.com/article/netflix-stock-plunges-after-price-restructuring

Yep. At some point, the trend will reverse, when people pull their head out of their ass and realize the price point was extremely reasonable. They can't find a better deal from Red Box, Blockbuster, Dish Online, or Hulu. It's $8 to stream all your want, or $8 to rent probably 6-8 DVDs per month.

I have a blockbuster membership for $20 a month and receive 3 by mail with unlimited in-store return/rentals. I average 20-24 rentals a month. That is a hell of a lot better than $18 for netflix's 1 at a time with streaming (streaming of crap that I don't want to watch)! I just couldn't justify giving netflix that much money every month, so I cancelled.

Neflix had Net income of $160M and Total Equity of $290M for year end 2010.

While they are successful, and I know these figures may sound like a lot to an individual, but for a company I would say Neflix is far from making a killing. Especially considering Netflix spent $117M in the first six months of 2010 on streaming content alone.

Now I would say, AAPL, GOOG, PCLN, and AMZN are making a killing.

[budwzr]

Exactly. They're foregoing huge profits to build something.

[lordsmurf]

Exactly. They're foregoing huge profits to build something.

International services. It's no secret. Most of the world lacks any serious by-mail rental service, or streaming service. Blockbuster already failed, so Netflix has a blueprint on what not to do.

Imagine an international version of Netflix now making worldwide movies available. You could pick up countless foreign TV shows and movies via streaming. And I don't mean just subtitles; there's tons of content available in Britain, South Africa and Australia that isn't licensed in the USA because the local industry isn't interested. Thus it's not imported.

Also, seeing some ******* CEO get a pay raise doesn't mean anything. Remember most CEOs were getting pay raises and bonuses, even in the worst of the recession. They have good contracts (good for them, bad for the world, written by morons).

[wulf109]

The problem with Netflix's strategy seems to be they are reducing there inventory of discs in favor of streaming and there international policy. Blue Ray disks released one year ago are not available on Netflix. They seem to be carrying stock on new releases only with very long waiting on those. Even SD DVD's are no longer carried and what's available is usually on wait. Personally I have no interest in streaming but Netflix appears to be gambling that it's the future.

[jagabo]

Personally I have no interest in streaming but Netflix appears to be gambling that it's the future.

It (streaming) is. The only question is when.

[handyguy]

$301 before price rise. $202 last week after they said no more STARZ, but $155 today? What happened?

[budwzr]

Personally I have no interest in streaming but Netflix appears to be gambling that it's the future.

It (streaming) is. The only question is when.

Yeah, Netflix even stated that they started up too soon. That the market wasn't ready.

[jman98]

The problem with Netflix's strategy seems to be they are reducing there inventory of discs in favor of streaming and there international policy. Blue Ray disks released one year ago are not available on Netflix. They seem to be carrying stock on new releases only with very long waiting on those. Even SD DVD's are no longer carried and what's available is usually on wait. Personally I have no interest in streaming but Netflix appears to be gambling that it's the future.

I know where you're coming from as while I do stream sometimes, I also like getting discs for some releases (no extras available via streaming). And right now Netflix is not allowed to stream some content that they can send out on DVDs to subscribers. But I read this week that their CEO's plan is to get them out of the physical media business and he views the people who left as customers that weren't in line with their future goals anyway, so they might as well leave now and get out of the way so Netflix can concentrate more on what they really want to do - stream.

It depends on what you want, but Netflix does still get some recent releases on BD for rental. And wait times are in part determined by how frequently you return the discs. A couple of months ago I rented a DVD of an old Russian movie and I was told that I had to wait to get it, but actually I ended up getting it maybe 2 days later than I would have gotten it with no wait. They probably only had 1 or 2 copies in their inventory. It definitely was not a film in demand. On average I only return 1 disc a week so my wait times are very very low. You can argue that I'm not getting full value for my money, but it is my money and I like the low wait times.

[TreeTops]

I think you guys missed my point about the stock plunge. If the stock goes really low, they will be bought out by someone and that new company will suck out any remaining funds and that will be their end.

[fooledagain]

I'm laughing at Netflix. They had a lot of goodwill from their customers yet chose to hose them with the new pricing plan. In short order they have lost their deal with Starz as well as a lot of customers. I wonder if they have learned anything. If not, then the ace wipes deserve what they get.