Another interesting article. I agree with this analysis. Simply put, Netflix don't have an easily defensible moat although the brand is exceptionally strong. It's a zero sum game between the streaming platforms and competition is going to be fierce. I expect to see some consolidation in this sector because consumers will get subscription fatigue if they have to subscribe to so many fragmented services in order to get the content they crave. Perhaps a massive takeover deal of Netflix could be in the future? Might it be a juicy target for Disney, Amazon or Apple or maybe even one for FB / Meta since they don't really have skin in this game at present.
Interesting take on Netflix. I hold a small amount in my son's JISA. The selloff has caused a 0.9189% loss to the JISA so not at all catastrophic. (37% of the JISA is in BRK.B)
Cannot say I completely disagree with you but I think they have a lot of room to increase subscription price without losing subscribers. As to content, they only have to get it right once every so often to keep people subscribing.
While I believe you are right that I would rather have Google/YouTube's business model (why oh why did I not invest a couple of years ago when I thought they were too expensive) I don't think they are directly comparable. You don't have to subscribe to YouTube and the content is, IMO, very different.
I think it is not unreasonable to see the subscription to Netflix increase by say 10 bucks over say three to five years. That is an additional $26,640,000,000 a year in revenue (that is roughly double current revenue) and that is without subscriber growth. And looking at subscriber numbers (especially penetration) at www.comparitech.com/tv-streaming/netflix-subscribers/ I would say they still have room outside of the US and some small countries for subscriber growth.
Anyway, it will be interesting to see how this plays out.
Another interesting article. I agree with this analysis. Simply put, Netflix don't have an easily defensible moat although the brand is exceptionally strong. It's a zero sum game between the streaming platforms and competition is going to be fierce. I expect to see some consolidation in this sector because consumers will get subscription fatigue if they have to subscribe to so many fragmented services in order to get the content they crave. Perhaps a massive takeover deal of Netflix could be in the future? Might it be a juicy target for Disney, Amazon or Apple or maybe even one for FB / Meta since they don't really have skin in this game at present.
Interesting take on Netflix. I hold a small amount in my son's JISA. The selloff has caused a 0.9189% loss to the JISA so not at all catastrophic. (37% of the JISA is in BRK.B)
I would love to see a bear/bull debate between you and Sean Stannard-Stockton at Ensemble Capital https://intrinsicinvesting.com/2022/01/24/netflixs-man-overboard-moment/!!
I am sure you have read their blogs on Netflix.
Cannot say I completely disagree with you but I think they have a lot of room to increase subscription price without losing subscribers. As to content, they only have to get it right once every so often to keep people subscribing.
While I believe you are right that I would rather have Google/YouTube's business model (why oh why did I not invest a couple of years ago when I thought they were too expensive) I don't think they are directly comparable. You don't have to subscribe to YouTube and the content is, IMO, very different.
I think it is not unreasonable to see the subscription to Netflix increase by say 10 bucks over say three to five years. That is an additional $26,640,000,000 a year in revenue (that is roughly double current revenue) and that is without subscriber growth. And looking at subscriber numbers (especially penetration) at www.comparitech.com/tv-streaming/netflix-subscribers/ I would say they still have room outside of the US and some small countries for subscriber growth.
Anyway, it will be interesting to see how this plays out.
Regards
Michael