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Comments

Joel

I really didn't get it yesterday reading all of the news on this... i thought price hikes were only for new customers, but I got an email yesterday saying that my plan would be automatically upgraded to the new pricing. I'm not super happy.

PRTV

Let's look at he stock after the Q4 results after they tally up how many customers downgraded after the December 2nd billing cycle. Based on what I'm hearing (forums and just speaking to people) it sounds like it's going to be quite a lot of people. Also we'll see how streaming subscriptions are affected when Comcast lower their internet bandwidth cap & start charging overages next year.

Racket

I am on the 3 out plan and rarely watch 3 films in a week. I pay for the 3 out plan but in reality I utilize it as a 2 out plan. I don't pay much attention to my netflix bill because its low for the 20-30 hours of entertainment my family gets out of it each week. Thanks Netflix you saved me a dollar a month on something I wasn't really paying attention to.

I am guessing Netflix has a goal to make the 3 out plan not the main plan anymore.

Rocketboy_X

I may in a year or so, but my DVD queue is already quite full of TV episodes... But my plan was to drop from 2 dvd's to 1 all along.

BP

Anytime Wall Street is mentioned I have to post this clip:

http://www.youtube.com/watch?v=zCktM5v1zOQ

That just about sums up my views on the most evil financial institution ever.

JohnnyBob

Who cares?

dAVe

The NFLX investors have been clamoring for subscription increases with baited breath far to long now. Finally they can all unpucker their butt kiss, give a collective exhale, and enjoy the Holiday season for what it truely is meant for... taking equity.

Jack

As an investor and a customer, I understand their need to make money - in the age of $4 coffee, I certainly don't think an extra dollar per month is going to kill anyone.

Thanks to Netflix, I've completely cut my cable and get exactly what I want to see. I think you'd be hard-pressed to have your entertainment dollar stretch as far as it has with Netflix.

My biggest worry is that the PE is now pretty high (now over 70). I've taken some money off the table, but am watching carefully as there will be some people cashing out which may drive the stock price downward.

Edward R Murrow

I don't think that the market understands that Netflix is voluntarily giving up their competitive advantage. The advantage that Netflix has over it's competitors is a very efficient DVD processing operation with a high cost barrier to entry.

Netflix seems to be pushing their customers into the streaming biz model where there's a low cost barrier to entry for businesses that own content. And the studios that own content don't have a 28 day waiting period for the cool new releases.

Hank

How many of those who proclaim that Netflix is run by idiots (as evidenced by this apparently ill-conceived and poorly timed price increase) are so sure of that opinion that they're going to put up real money by selling the stock short?

Anyone? I didn't think so.

Zino

One rule that seems to bode ill for companies (and people, too): they forget what made them famous in the first place. In Netflix's case, it's DVD deliveries.

I applaud their streaming service... it makes all kinds of sense. But it doesn't make sense to cripple the DVD service to make that happen. It'll happen as customers decide their infrastructure and preferences are better-served by streaming.

By all means, charge a fee for streaming but leave the DVD customers ALONE! Living in a rural area, we have no option for streaming from Netflix, nor do millions of other Americans who can't get broadband service.

I think this will open up competition from Hulu since the DVD delivery was an edge that Netflix had to entice members. Looks like they've just decided to be second fiddle.

snipenekkid

hulu+ is a waste of bandwidth and they already have dropped their price to $7.99 from it's previous $9.99, currently it's a loser service.

NF's move to the same $7.99 basically cuts off Hulu, likely it's primary competition off at the knees thanks to the content differences. The NF catalog is HUGE compared to Hulu but Hulu would have had access, thanks to the real owners of the business, to a very large catalog. But we are talking cable companies here, Comcrap, whose plan was likely to turn Hulu into just an online TVOD service for about the same price as basic cable but keep the commercials. This move by NF seems to be a first pro-active move to force Hulu's puppet master's, comcrap, hand.

I had been and was happy when NF opened the streaming only program. I don't need latest content, in fact the very reason people often offer for dropping cable is because of the crappy content but now complain about the "agony" of 28-days if laughable. You have access to the exact content you want for 1/4 to 1/8 the price of even basic cable which includes all the crap you claim made you switch to before.

My only complain about my NF vids is even though I told them I do not want non-english titles I get tons of them shown to me. Oh, wait my other complaint for several years now has and still is the total lack of a playlist/auto-play function.

But for $7.99/mo I am perfectly happy to not worry about DVD's...and about Blu-ray, are people really that whiney thay need that as well? DVD is not good enough? Even DVD is better video that you see at movie theaters. Plus watching at home stops having to deal with the gang-bangers playing "daddy" with their 18-kids and porcine pincushion/wife or schizo movie viewers who figure they will say and do anything they want w/o regard for the other people who all paid to see the same movies.

RacerX

I'm a subscriber and don't care for the price increase. I would have liked to see them flatten it out--like adding Blu-Ray, instead of upcharging. I don't mind watching online but the quantity of online titles is a small subset of total offerings.
IMO, there should be a $14.99/mo plan for Blu-Ray & 2 movies.. maybe cap at 8/month or something. Anything higher than that is getting a bit pricey.
And I haven't had cable in years--could care less about regular tv. I enjoy movies but would like to see more options for rental plans.

Edward R Murrow

Hank - as I write this, Netflix has a P/E of 71.13. You don't think there will be a correction? Typically, P/E's at this level indicate that a stock is overpriced.

Hank

But a P/E of 70 is not overpriced? Or 50? Or 30? If you had sold Netflix short at any point in the last year when it has been "overpriced" you'd probably be pretty unhappy right now.

At this point the stock might go up or might go down, the high P/E is an indication that the market thinks pretty highly of Netflix' market position and its management team's ability to execute. All those experts here who seem to think Netflix is managed by idiots seem to know better and they have a perfect opportunity to make some real money rather than just crying over a few bucks per month.

How many shares have you sold short?

Edward R Murrow

I don't sell short. I can't bring myself to bet against any American company. Perhaps I'm too patriotic? I'm a buy and hold type investor.

That aside, Netflix doesn't meet all of my qualifications for investing: 1) low P/E 2) high dividend yield 3) room for growth against their 52 week high 4) dividend reinvestment 5) leader in their industry 6) solid management team and board of directors 7) product visionaries 8) able to attract and retain industry leading talent 9) high barriers to entry for competitors

IMHO, Netflix has some of these attributes, but not all. But to each their own. I've learned the hard way that 'trees don't grow to the sky' and at some point, profits will be taken.

BP

@ snipenekkid

Your probablem could be easily rectified by not (1) seeing movies in downtown Detroit and (2) not being a fucking racist prick.

I go to movies all the time. Yes, some are full of pricks (like you). Some are not. Sometimes nerds pull out their cell phones and text. Sometimes it is gangbangers tryin' to chill out, relax, max, all cool. Sometimes it is crotchety old women who think they have a right to do whatever it is they want to. Most the time it is none of the above, and I watch my movie in perfect harmony with my (few) fellow movie-going patrons.

Maybe it's the time of day I go. Or how long the movie has been out. Or what theater I go to. Or even WHAT movie I go to. Or maybe I'm just not some self-entitled prick that goes out looking to have a bad time so I can complain about it on the internet. Twice, TWICE in my life have I ever seen a film with other people who were so unbearably annoying that I felt the need to say something (one drunk guy during the credits of Return of the King and a couple of "gangbangers", miraculously sans "18 kids", during There Will Be Blood). You must have baaad luck.

Tell me, do you complain about people pushing at a rock show? Or drunk guys yelling at a football game? No? Then STFU. Yes? Double STFU. We're a social species. No, most of us aren't perfect, and sometimes we do dumbass shit, but there is no "rude theater patron" epidemic. There IS a self-absorbed closeted-nerd epidemic, however, and you're it.

You want a quiet theater to jerk off in? Go see a film at 11am on a Saturday or 10pm on a Tuesday. Otherwise expect to deal with the mouth-breathing unwashed masses that you so elitistly DON'T think you're a part of.

At the very least, don't come onto hackingnetflix and post borderline racist shit. "Thanks, bye!"

BP

Er, s/probablem/problem/

Hank

There's nothing unpatriotic about selling short, it's just business.

I'm not recommending anyone buy or sell Netflix. All I'm saying is that anyone who is so confident that they know better than Netflix management should prove it by taking a financial position one way or another. Hell, given the high P/E that you pointed out you'd be foolish not to bet against NFLX if you thought their management was even simply mediocre.

Edward R Murrow

Just like selling short and betting against America is unpatriotic, American companies that outsource jobs are equally unpatriotic. We need to start calling a spade a spade and start speaking the truth. It may be just business to you, but having the American economy reclaim it's place in the world is a matter of national pride for some of us.

Hank, let me guess - you sold short following 9/11, right?

Hank

Thanks Ed, for putting things back in perspective for me.

Whenever I lament that these forums are overrun with clueless people, a post like yours reminds me that it is because of these same clueless people that I've been so successful. Keep investing with your heart and keep those "patriotic" but unprofitable companies alive so that the smart efficient businesses which I invest in can eat their lunch.

Mith

Selling short is not unpatriotic. It's no more unpatriotic than purchasing put options to protect your long investments from an unexpected event.

Actually shorting is very capitalistic, very "flag-waving" patriotic because you are freely making a bet on the open market in search of personal gain. These gains, if achieved, can be used to invest long in other companies. It's like a forest fire clearing out the mangled junk and rot and providing a clean fertile landscape for new growth to sprout.

It's true that when a company fails, many people will get hurt. But the problem is not market forces knocking out the company, it's the structural problems that make it very difficult for people to move (physically and figuratively) into another company/career/location. Selling your house may require ponying up a 5% realtor commission, 2% transfer tax, etc., not counting the fact you may want to stay put and be near family.

Edward R Murrow

Hank and Mith, you both convinced me that shorting Netflix isn't a bad thing after all. I'm glad I took your advice because I shorted Netflix at it's 52 week high of $209 and I'm rolling in money as of market close today of $185. Thanks again for your advice.

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