Netflix users don't want ads

[Zookster]

Other than live TV, I refuse to pay for any service that gives me ads. The trailer for another show on the same service before the movie/episode starts (like on Prime, HBO Now, etc.) are fine. And I can live with ad-free Hulu and CBS All Access at their current prices, especially since they give me a free month or two every year. Netflix is already $13 for their basic HD-quality level. I can't see myself paying anything more in the near future to get an ad-free version of their service. Some of their originals are really good, but not that good; and by the end of the year, that's all they will have to offer beyond older movies and the few network cable TV shows they haven't lost the licenses to yet.

 

[long_time_DNC]

Let’s keep in mind that this was a study. Netflix has not said they were going to do it at all. The results of the study said that 23% would drop their subscription unless the monthly cost dropped. So, let’s say they decide to do just that. They add the third tier with ads at a greatly reduced price. More options isn’t a bad thing.

The fact that it was a survey means they're looking to see what kind of hit they'd take if they added commercials. That means (obviously) that they're thinking about it (probably rather seriously). I have premium movie packages via Dish because when I watch movies, I don't want to have to sit through ads every 10-12 minutes. If Netflix stuffs commercials into their offerings, it makes them no different than the commercial channels I already pay for via Dish and I should pay more (they're raising their rate on July 15th) for that why? If they add commercials (and at some point, I'm sure they will), then they've lost me as a subscriber...

 

[harshness]

That means (obviously) that they're thinking about it (probably rather seriously).

I'd imagine they've all but decided and this was the last gasp for those on the inside that know it is going to be a hard sell to try to turn the money barge around.

 

[Radioguy41]

In case anyone hasn't been paying attention, Netflix is the Titanic and it's already hit the iceberg. They're scrambling to plug up the holes any way they can and paid advs is almost a certainty. Netflix is $14 billion in debt and someone has to pay that bill. The research being done is to help determine if the revenue from advs will more than offset the revenue lost when people cancel. Unfortunately as more and more content is pulled from Netflix this becomes a downward spiral. If survival was over/under, I'd take the under.

 

[Bruce]

In case anyone hasn't been paying attention, Netflix is the Titanic and it's already hit the iceberg. They're scrambling to plug up the holes any way they can and paid advs is almost a certainty. Netflix is $14 billion in debt and someone has to pay that bill. The research being done is to help determine if the revenue from advs will more than offset the revenue lost when people cancel. Unfortunately as more and more content is pulled from Netflix this becomes a downward spiral. If survival was over/under, I'd take the under.

Netflix takes in roughly $1.5 billion a month from subscribers, I think they will be fine.


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[long_time_DNC]

I'd imagine they've all but decided and this was the last gasp for those on the inside that know it is going to be a hard sell to try to turn the money barge around.

It's going to be a hard sell to get subs to swallow ads...they may end up shooting themselves in the foot...

 

[harshness]

Netflix is $14 billion in debt and someone has to pay that bill.

In the likely event that you started looking at how corporations work recently, I'll tell you that debt is not a bad thing. It is how it is managed that is important. Debt is how you make preparations for new customers and new content and if all goes well, that turns into huge revenues. Thus far, Netflix has been printing money like few other companies.

Netflix is adding millions (around 3 million) of subscribers per month. That brings a lot of revenue as theBruce pointed out. After the last quarterly report, Barron's declared their earnings "superb".

The Disney announcement (and to a lesser extent, the Apple TV+ announcement because it appears to be an ATV exclusive) have been the only real concerns and they aren't here yet.

There are no sure bets, but many companies would kill to have a worst case scenario 20% as promising as Netflix has.

 

[ncted]

Regarding product placement, while I noticed the products placed in ST3, they didn't really detract from the story in any way. The one really obvious one was a conversation I had at that time with my friends who were approximately that middle school age. If anything the products placed in ST added to the background and helped set the scene. Of course, they also triggered feelings of nostalgia in people of a certain age, and, on a personal note, they were much more successful than a stupid commercial at actually getting me to buy something:

 

[VictoriaFTA]

We tried product placement in our TV Shopper shows once but discovered it was more trouble than it was worth. Managing it before the taping, then getting our client to agree... just got to be a PIA so we ditched the idea and just did commercial breaks for 3 x 2 minutes.


Disagree! The only remaining benefit is the DVR and I wonder about that too with so much on demand content in the cloud you can watch anytime anywhere. I recently discovered having Showtime service on IPTV gets me hundreds times more selection than what the Showtime on Dish Network offers. Not all content in IPTV is $$ either. I have 20 networks of programs on demand to choose from that are free. As soon as I can find a DVR of IPTV that tunes my local TV channels and DVR's them the dish comes down and I save $100 a month. It also has to do 4K HDR too.

Not enough propaganda channels available on streaming though! Fox News is a cable/satellite exclusive.

 

[ncted]

Apparently, they don't even need to introduce ads to lose customers:

Netflix Stock Tumbles After U.S. Subscribers Drop for the First Time in Years

 

[Zookster]

Apparently, they don't even need to introduce ads to lose customers:

Netflix Stock Tumbles After U.S. Subscribers Drop for the First Time in Years

I wonder how much of that loss in US subscribers can be attributed to people dropping the service for a couple months to sign up for HBO to watch the GOT final season, though I'm sure the price increases played some part as well.

 

[ncted]

I wonder how much of that loss in US subscribers can be attributed to people dropping the service for a couple months to sign up for HBO to watch the GOT final season, though I'm sure the price increases played some part as well.

Maybe? Who knows? They (Netflix) seem to think it was just a somewhat weaker content slate in Q2 after a very strong Q1 subscriber increase. From a WSJ article regarding ads:

Although some Wall Street analysts have suggested that Netflix will at some point create an advertising-supported version of the service, the company once again shot down that idea.


“We believe we will have a more valuable business in the long term by staying out of competing for ad revenue and instead entirely focusing on competing for viewer satisfaction,” Netflix told shareholders.

 

[harshness]

I wonder how much of that loss in US subscribers can be attributed to people dropping the service for a couple months to sign up for HBO to watch the GOT final season, though I'm sure the price increases played some part as well.

I'd be willing to wager that is was a rather small impact. Netflix isn't well-established for programming similar to GoT since they offed the most-excellent Marco Polo. The Last Kingdom was a good shot over the bow, but I'm not sure they really had their heart in it. Based on my perception of how well that community is served, I reason that there wouldn't be that much cross-over. Just because most of the series seem to have Sean Bean in them doesn't make them GoT-like.

 

[comfortably_numb]

The title of this thread should be "Netflix: 'As the World Churns'"

 

[Bruce]

The title of this thread should be "Netflix: 'As the World Churns'"

I am amazed at some of these stories about Netflix, like this quarter spells the end, please, they still added 2.7 million subs worldwide and revenue was up 26%.




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[harshness]

I am amazed at some of these stories about Netflix, like this quarter spells the end, please, they still added 2.7 million subs worldwide and revenue was up 26%.

So they went from printing $100 bills to printing $20 bills. They're still printing money. The forward guidance isn't what it once was, but if you want to invest in the OTT sector, you could do much worse. You can pretty much bet that Hulu would kill for those numbers. A few of the OTT services have yet to turn a profit while others are bleeding money and subscribers.

As long as one finds value in subscribing, the company's financials don't mean a thing in the near term.

 

[Zookster]

I'd be willing to wager that is was a rather small impact. Netflix isn't well-established for programming similar to GoT since they offed the most-excellent Marco Polo. The Last Kingdom was a good shot over the bow, but I'm not sure they really had their heart in it. Based on my perception of how well that community is served, I reason that there wouldn't be that much cross-over. Just because most of the series seem to have Sean Bean in them doesn't make them GoT-like.

I'm not talking about carrying a comparable show; I'm talking about the ability to pay for and the time to use the various on demand OTT TV services. Just anecdotally from the groups I frequent, I know I'm not the only one to sign up for HBO for two months just for GOT, and suspended other services in the process. Believe or not, people who watch GoT also watch a lot of different things on Netflix that have nothing to do with dragons and sword fighting.

 

[harshness]

I'm not talking about carrying a comparable show; I'm talking about the ability to pay for and the time to use the various on demand OTT TV services. Just anecdotally from the groups I frequent, I know I'm not the only one to sign up for HBO for two months just for GOT, and suspended other services in the process. Believe or not, people who watch GoT also watch a lot of different things on Netflix that have nothing to do with dragons and sword fighting.

My point was that GoT isn't really an alternative to Netflix and vice versa. You perhaps also run a risk with Netflix of the price going up before you come back and not being grandfathered.

 

[Radioguy41]

Netflix takes in roughly $1.5 billion a month from subscribers, I think they will be fine.


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That's for the year of 2018, not per month, and income figures mean nothing when not compared to outflow. For the fiscal year of 2018 Netflix net operating cash flow was negative $2.85B, as in billion. Their cashflow statement is easily found on line had you searched for it.

They're expecting a negative cash flow of $3.5B this year. That will make 5 straight years of negative cash flow and large growing debt. I stand by my original post.

Netflix now expects to burn through $3.5 billion in cash this year. That's about $500 million more than it previously forecast.

 

[Bruce]

That's for the year of 2018, not per month, and income figures mean nothing when not compared to outflow. For the fiscal year of 2018 Netflix net operating cash flow was negative $2.85B, as in billion. Their cashflow statement is easily found on line had you searched for it.

They're expecting a negative cash flow of $3.5B this year. That will make 5 straight years of negative cash flow and large growing debt. I stand by my original post.

That is not for the year, they have about 150 million subs worldwide, so if you multiply that number by $10 a month ( a average, since some pay more, some pay less ), that is 1.5 billion a month.

Another company with long term debt-Dish Network at $15.14 Billion, are you predicting them to be a sinking ship as you did with Netflix, I would be more concerned with Dish since they have lost almost 4 million subs in the last few years vs. Netflix which has only gone up.

DISH Network Total Long Term Debt (Quarterly) | DISH





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