Netflix Down 40% in 2 Months. What Now?

• Report this Comment On September 15, 2011, at 6:28 PM, mcjimmy wrote:

  Netflix CEO quoted when asked why Americans pay more for the service than Canadians.

  "How much has it been your experience that Americans follow what happens in the world? It's something we'll monitor, but Americans are somewhat self-absorbed."

  Then the nerve to jump prices 60%.

  Looks like big Reed might be the somewhat self-absorbed one this time. Nice one. He has fool written all over him.

• Report this Comment On September 15, 2011, at 7:05 PM, Patricia013 wrote:

  Yep they really shot themselves in the foot this time. I'm watching the stock drop and I'm guessing they're getting just what they deserve. I started on Netflix a couple of years ago - getting 3 DVD's at a time plus the stream - cost: 18.95 with tax each month. Okay so they went ahead and did away with that plan completely so I moved down to 1 DVD at a time plus the stream - cost: 9.95 a month. Now they've decided to split DVD's and the stream. This meant my 1 DVD at a time plus the stream would now cost 15.95 a month! So, now I'm down to the steam only 7.99 a month....and BLOCKBUSTER IS LOOKING AWFULLY GOOD TO ME!!! Hear that Netflix???? I think you're beginning to realize I'm not alone!

• Report this Comment On September 15, 2011, at 8:55 PM, nigratruo wrote:

  Well, it is true that Americans are really self absorbed. I am from Europe originally and now live here and am interested to know what is going on around the world, be well rounded informed on global affairs and this is really hard to do watching US news. The only things you hear here is the big news, spectacular stuff happening. Things like "Germany's economy is going up up up, while US economy is going down, what are they doing wrong?" you don't hear at all. Instead of reporting what is going on worldwide, US news networks prefer to report local news that is hardly newsworthy at all (and where you can see that they just needed a filler and must not be aware that there is a world outside the US). It is a standing joke in Europe that what the US calls the "world series" is only limited to them, which hardly constitutes the world. I have to watch German TV online to keep up to date on the world (as they report with more journalistic integrity about stories and news, not just what is flashy and sensational.

  In any case, I am not happy about the stock drop of course, but wonder one thing:

  Starz and the content provider want to get more money for their content. Netflix is not providing that seems like, they are too cheap for them. They just had a rate hike (to pay for the more expensive content?) which ticks people off. How come they think that they can get that cheaper anywhere else? Do you think that starz will do a cheaper deal with blockbuster or Amazon?

  What I man is that any kind of increase of price on content source will also make content more expensive for the end consumer.

  And maybe just maybe Starz will come back to Netflix, realizing that they wish more money for their films, but won't get it likely, as there is massive overproduction of media material that grows every year, you can see that vividly by how fast movies lose value when they are sold on DVD or Bluray.

  So it might be a pipedream of the content owners to get more cash for their stuff and as current, Netflix owns the market. Blockbuster could not touch them before, because they have a vested interest in brick and mortar (and will never be able to keep up with netflix on the cost, as netflix is only online.) This advantage becomes even more pronounced when the game is only to stream online. Then brick and mortar becomes totally obsolete, you won't go pick up a streaming movie at your local block buster.

  I suspect that netflix realized that sooner or later, everything will be streaming and the minority is shipping based. I won't be changing to blockbuster anytime soon, as netflix delivers what I want and the price increase does not bother me that much, as I save so much of not having a premium TV cable subscription. That stuff costs a multiple of what netflix has, without commercials AND it is pick and chose what I want to watch and WHEN.

  For me, cable TV is over, totally extremely overpriced for what it delivers. And I object to pay for premium content and then have to watch commercials still. In Europe, Sat TV is free, you don't pay a cent for that. It is full of commercials. Here in the US, as some friend that has a dish in Europe told me "you get the privilege to pay money to watch commercials every 10 minutes"

  If you check out the total cost of having a cable TV subscriptions (anything else than just basic cable, which is garbage anyway), and sum that up for a year and compare it to what netflix will cost you, EVEN with the price increase. well.. do the math!

• Report this Comment On September 15, 2011, at 10:08 PM, Topekalady wrote:

  Should I sell NFLX? I don't know what to do at this point.

• Report this Comment On September 15, 2011, at 10:40 PM, tstalkin101 wrote:

  Topeka, How many shares and what's your cost basis?

• Report this Comment On September 15, 2011, at 11:20 PM, adventure2010 wrote:

  Hold on to NFLX it will bounce. They lost 1 million customers out of 24 million. I would say thats pretty good.not to mention all the subscribers they are adding world wide. Just think of the experience most have with NFLX they are not going anywhere but back up!

• Report this Comment On September 16, 2011, at 6:24 PM, Joe4IZ wrote:

  There are too many other players in this delivery system for Netflix to think they can get away with what they are doing. I look for their base to quit growing. Most of the streaming is junk filler. They did not have enough content online before they gave people a bad taste in their mouth.

  I never owned it due as I always thought that someone else would eventually catch up. That never happened, but it could now.

  Yes, I use their product, but kept the mail delivery instead of the streaming aspect. I never used the streaming much as most of the movies were junk. So all they did was get less revenue from me.

• Report this Comment On September 16, 2011, at 8:16 PM, nigratruo wrote:

  I sold part of my stock. Too late as it is, since the stock really lost it big time, it is half down since I wanted to sell to get my profit. It is amazing how skittish and panicky investors are, and how they sell on a hair line trigger. As motley food once stated, fear and greed will kill your investment return and it is so true: I made most money by just sitting on my shares. 2008 crash? Sat on it. Market down, lots of jobs lost? Sat on it. The question is always for me: what will a company / stock in the log term? Will the company collapse? Is the stock inflated and will the bubble burst and it will never ever return to its height? If yes, sell. But otherwise keep it, sit on it, no matter what. Market goes up and down, up and down, and I pitty those poor schmoes that can't keep their fear in check. They often confuse temporary downturn with "company is going out of business".

  Patience as in many areas of life, in investing more than anything, pays off big time.

  Considering that momentum is something that seems to matter (stock moving up or down, and keep moving in that direction, because people like to move in one direction for a while, meaning in nflx case, they will sell sell sell), I sold part of mine, as I expect the stock to really go down endlessly, because the fear grips hard here.

  But in the long haul, I expect Netflix to bounce back, as this stock crash is way too extreme and netflix still has the strongest streaming brand out there. They basically invented it. I have to say that I am very happy with my netflix subscription: I can watch lots of episodes on demand, anytime I want, a thing that I could never do with a much more expensive cable TV subscription. I cannot share the view of others that netflix only got garbage for online streaming: There is a lot to chose from that is high quality.

  I use both subscriptions, mail and streaming, as they do different things for me: streaming is instant and caters to my ADS and mailing gives me cheap access to bluray, which beats streaming in quality big time (streaming is still not full HD 1080i) and buying these blurays would cost me a big bundle more.

  So the question is: can blockbuster, and all the other provide the same quality streaming than netflix? Can everybody just replicate what netflix does? Well, I doubt it really. Why haven't they done so so far? And it seems to me that every content provider wants to run their own show, offer subscription for some some media that they have. So will a subscriber go and pay 10 bucks here, and 10 bucks there and 10 bucks to another? Instead of just using netflix, which is one that offers much more choice? People will easily realize that netflix is a better deal than the media providers directly: after all, they are reluctant to go with Netflix, to host their content on them, because they want more money for it. But that is not going to happen, since media content is now a commodity and there is way too much offer to make prices go up, no, they are declining. Instead of creating quality and making the same amount of movies or less of more quality, they ramp up the quantity. And as it is, eyeball time is limited, you can only watch that many movies per month and so like in TV, where there are more and more channels, revenue and value of individual movies decline. It is pretty much the same as when farmers would try to outdo themselves producing milk: the more overproduction there is, the more the price drops.

  Talk about a drawback for the media producers for being greedy. What they are doing, is not useful for us consumers: we have to wade through more and more low quality content to find a jewel, a good and wonderful movie.

  I expect Netflix to keep dominating the field. Remember 5 years ago when blockbuster started doing competition to Netflix? Well, back then everybody expected blockbuster to wipe out Netflix. And did they? It is also important to ask yourself, where is a company in their life cycle? Beginning, middle or end or over?

  Compare Blockbuster with Netflix in this.

• Report this Comment On September 16, 2011, at 8:19 PM, nigratruo wrote:

  Oh by the way: I am originally from Europe and an interesting fact: Europe got nothing like Netflix. Absolutely nothing. So Europe will be another market that they can take over without no resistance whatsoever.

  People over there don't even know what they are missing, they are still renting their movies in brick and mortar stores.

Add your comment.