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I really like Hastings attitude and upfront attitude in this interview. He makes it clear he's not trying to destory the big cable compaines, that netflix can't have all the content people want.

He also seemingly really wants to see faster networks built not just in the US but world wide. From Fiber Optics internet, whatever the next major wifi and cell phone networks are, etc. I wish everyone felt like he does, so we can actually advance ALL of our communications. Rather then have consumers sit idly by while services improve slightly if at all.


The statement Reed made about no longer being in the New Release businees only complimentary to NR business really says it all. He also said at $8 that they couldn't afford to be in the New Release business. Hello RERUNS.


My take on Hastings rhetoric is that he's carefully covering his butt with subtle revelations of the serious issues that they are dealing with so that when this thing does come crashing down and investors and analyst turn on him he can say well I told you so but you didn't listen. He actively helped create this massive bubble by not openly discussing serious issues like churn and content costs and now he's setting up his alibi for when the stuff hits the fan.


Open Letter to Allthingsdigital Sent.... 2-Jun-11 08:27 am

To: kara@allthingsd.com

All that talk and you failed to ask a single question: how can the company justify OVER $1.6B in off balance sheet obligations when it makes less than $100M pre-tax on every 10M subs…..the math does not add up. It would take them over 5 YEARS to return that amount of cash obligation and will need to add 50M subs in the US net and nearly 80M gross or FULLY PENETRATE THE ENTIRE BROADBAND MKT. Plus, as of right not if these obligations are taken into account the company IS INSOLVENT AS IT ONLY HAS 275M IN EQUITY. Do you think subs can grow to 100M in the US implying 100% broadband penetration when cable cos by year end will offer exactly what NFLX offers on top of competitors like HULU & Crackle, GOOG & AMZN? The answer is simply no and you and the sell side analysts perpetuate this scam on investors by not challenging Hastings at his own game. He is manipulating you into believing the addressable mkt is somehow bigger by spinning the world wide mobile handset mkt is somehow the real mkt opportunity. But common sense says its simply not.

Why don’t you stop this circus of idiotic questioning towards Hastings and really start asking questions.


And my last comment about all this......

What happened to the "we're a streaming company" mantra and phasing out the DVD business?

What about all that bs about substituting postage costs with streaming content costs?

Slippery slope these fools are on.

From yesterday's Q and A:

"How would you compare the difference between the subscriber economics for your traditional DVD customer in the U.S. versus the newer, pure streaming-only customer?"

David Wells:
"It's a little apples and oranges, if everybody heard the question, sort of comparing the economics between a DVD customer and sort of a hybrid or a streaming-only or pure streaming customer.

To the extent they're sold separately it's a little apples and oranges because one's based on a marginally fixed basis, one's on a marginally variable basis. But in general, you can imagine that we're-- for a while the hybrid service was sold as a package because largely the streaming-only content offering wasn't strong enough to stand on its own. And now that it is, for DVD it's a two dollar upcharge basically for those subscribers.

So you could imagine a world where the two dollar upcharge is actually not paying for the variable cost or the incremental cost of a DVD subscriber. And, you know, we're looking, down the road, to both re-engergizing the DVD function, sorta paying a little bit more attention to it, or at least stop really de-emphasizing it, as well as right the economics on that."

Hastings has claimed the $500-600 million per year they spend on DVD postage will be used to pay for streaming content, since the DVD business is going away.

So it is a big deal that Wells says:

"And, you know, we're looking, down the road, to both re-engergizing the DVD function, sorta paying a little bit more attention to it, or at least stop really de-emphasizing it"


But then again you get a comment from Reed yesterday saying

"Discs I think we should set to the side, because we’re mostly focused on streaming."

SO WHICH IS IT? I don't even think either of these guys answered any questions in either interview just a bunch of round and round talk


Yo, you have good points, but we are fans and users, we are not interested in the obsessing over Netflix future pitfalls. Stop screaming and more people will listen.


Better yet, get off your computer, go stream some Netflix content while you can and wait for the rapture.


That's what mindless sheep do. I'm no sheep.

Mitch Randall


Since I don't have any personal investment in Netflix beyond the amount I pay per month to get discs and stream, the blah blah blah about its financials REALLY doesn't matter to me.

If Netflix falls on its butt some day like other companies have in the past, all I'm losing is a source of entertainment. More than likely something else will pop up to take its place and I'll be a happy camper. I don't quite understand why these comments need to be made on almost every post because it's pretty clear almost no one cares about it.


> how Netflix compliments cable


Mitt Romney

Don't be that guy.

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