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manuel

Netflix Among Top 10 Spenders For April 2005

ClickZ reports Netflix spent $12.5 million dollars an advertisement during the month of April, 2005. Blockbuster was not on the list.

http://clickz.com/stats/sectors/advertising/article.phpr/3507981

In fact, Netflix outspent retail giant Amazon by $10 million dollars. Where's all this money coming from?

manuel

Oops, I'm sorry. I'm too stupid to provide full disclosure.

From the link I posted:

Methodology: Chart represents display advertising in standard and non-standard formats. Media expenditure estimates do not always take into account special considerations including publisher discounts, barter agreements, co-sponsorship, affiliate relationships, etc.

manuel

This is when I'd love to know the IP addresses of shills posting on this site. You can use my name to post but I'd never use language like that or sound like a shill. I guess I struck a nerve somewhere with my post. Coward that you are just like a Klansman.

"What's also chilling is the ease with which plaintiffs' lawyers have obtained the true identities of anonymous posters as well as other personal information. The Business Week article described a situation in which a company called ITEX Corp. filed a John Doe suit against an online critic in response to postings on a Yahoo message board. Yahoo gave ITEX the poster's internet protocol address, which the company was able to use to locate the poster's internet service provider, which turned out to be CompuServe Inc. In response to a broad subpoena, CompuServe turned over not only the poster's name, but also his credit-card number, the name of his bank and a list of some of his online purchases."

BTW, Nice choice on the link for my name.

manuel

This is when I'd love to know the IP addresses of shills posting on this site. You can use my name to post but I'd never use language like that or sound like a shill. I guess I struck a nerve somewhere with my post. Coward that you are just like a Klansman.

"What's also chilling is the ease with which plaintiffs' lawyers have obtained the true identities of anonymous posters as well as other personal information. The Business Week article described a situation in which a company called ITEX Corp. filed a John Doe suit against an online critic in response to postings on a Yahoo message board. Yahoo gave ITEX the poster's internet protocol address, which the company was able to use to locate the poster's internet service provider, which turned out to be CompuServe Inc. In response to a broad subpoena, CompuServe turned over not only the poster's name, but also his credit-card number, the name of his bank and a list of some of his online purchases."

BTW, Nice choice on the link for my name.

"Coward that you are just like a Klansman."

Are you trying to say he is going to "string someone up" by the neck?

CashForFlow

manuel,

Get use to it.

Tim

"Coward that you are just like a Klansman."

Have you lost it? I mean, it's annoying when someone spoofs your name, I know, but to compare him to a racist with violent tendencies? That seems way off mark, dude.

I'm not a big fan of the KKK or the ACLU. Just thought I'd throw that in.

manuel

More on the Blockbuster "spending so much on advertising" issue:

Netflix 1st Quarter 2005 Results:
23.2% ($35,760,000 of $154,140,000) was spent on "marketing."

Blockbuster 1st Quarter 2005 Results:
7.7% ($119,000,000 of $1,548,900,000) was spent on "advertising."

It looks to me that Netflix is spending %16 more of their revenue on advertising compared to Blockbuster. Yes, I believe Blockbuster is spending my membership fees wisely compared to Netflix.

Manuel,

You should compare the growth of advertising/revenue between BBI and NFLX?

BBI's advertising went from $50M to $119M. ( +238% ) With this growth was just a 3% increase in revenue.

NFLX's advertising went from $26.7M to $35.7M ( +33% ). With this growth was a 154% increase in revenue.

So NFLX is making more efficient use of their advertising dollars when compared to BBI.

manuel

Where are you pulling these numbers from? Yes, last quarter Blockbuster's revenue increased 3% since the previous quarter. However, Netflix's revenue increased 7% from the previous quarter. I'm not an investor so you need to make clear what it is your posting. Post links to what you're referring to so I can check your information.

Mike K

Manuel,

Blockbuster is spending almost 3 times as much as Netflix on marketing/advertising and they have a same-store revenue decline of more than 5% per year (is Blockbuster advertising "no more late fees" to try to slow or stop the decline?).

From what we know so far both online services are adding new members at the same rate (and Blockbuster is doing it at a much lower price, too).

Worse, Netflix is probably stealing the 1 million or so new members they'll add this year from Blockbuster.

Where's the money coming from? Netflix is running at or close to breakeven, while Blockbuster is running at a loss.

I really think online advertising is much better than a tv branding campaign (you can't click on a commercial and sign up for Blockbuster yet). I'm wondering if Blockbuster doesn't release their online advertising spending information. You would think that some of the $119 million would have been spent online.

There are two ways of looking at this, and I think Netflix is spending their money wisely, going for growth and forcing a much larger competitor to spend a lot more money to catch up.

- Mike

Manuel,

It's called checking Edgar online. When comparing revenues for seasonal companies, it is best to compare one quarter to the same quarter of the previous year, rather than just the previous quarter. NFLX is a very seasonal company with most of their growth happening in Q4/Q1.

All the comparisons I did were Q1 2004 vs Q1 2005 for both companies. NFLX had a 154% increase in revenue, while BBI's was only a 3% increase. NFLX had a 33% increase in mktg/ad, while BBI was over 200%.

BBI will raise their prices. I thought they would annouce their price hike with their in-store fulfillment rollout. However, they've delayed their in-store fulfillment rollout, so who knows. I have a hard time believing that BBI's "new" board will permit these losses beyond the end of this year.

BBI annoucing a price hike late Q4 / early Q1, and NFLX annoucing they've reached 4M would make for an exciting time for NFLX investors.

BBI ( 2004Q01 vs 2005Q01 )
Revenue:
1,503M to 1,548M
Mktg/Ad:
50.0M to 119.0M

NFLX ( 2004Q01 vs 2005Q01 )
Revenue:
100M to 154 M
Mktg/Ad:
26.7M to 35.8M


BBI's numbers:
http://www.edgar-online.com/bin/cobrand/?doc=A-1085734-0001193125-05-102261

NFLX's numbers:
http://www.edgar-online.com/bin/cobrand/?doc=a-1065280-0001193125-05-102632

Tim

Now, there's some good posts with resources! Thanks.

Dan

Looks like the price increase will go into effect August 19, better sign up now to enjoy a couple more months of the 14.99 price!!

http://blockbuster.custhelp.com/cgi-bin/blockbuster.cfg/php/enduser/std_adp.php?p_faqid=56

RG

Blockbuster just announced a price increase. It's going up to $17.99 beginning Aug. 19.

Current subscribers (me) aren't billed the higher price until their billing date in October. Also, the website still reflects the old price.

I just finished a two week trial of both Netflix and Blockbuster, and basically chose BB because of the cheaper price and free store rentals (netflix website was much easier, better recommendations, etc.), so I'm a little disappointed to hear this.

Super pissed

When I read this on Reuters I couldn't believe it. It is the SECOND increase this year. I sent an email to them trying to validate it , then saw in my email box a lovely worded letter about holidays, giving, and-oh yeah - you're getting jacked from 21 to 34 bucks. I cancelled immediately and signed up with Netflix.

It's unfortunate that the CFO and CEO didn't do their homework and have all but decimated their margins on rentals. This however is not my problem.

I believe that should grandfather the subscribers, the ones who are in already, should stay at their existing rate and new customers can come in at the higher rate.

They are complete morons.

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