15 votes

Netflix stock price drops 35%, posting biggest fall since 2004

23 comments

  1. [8]
    cloud_loud
    (edited )
    Link
    Netflix has always been a fascinating case study. Because it was trading as much as a tech company, when in reality it's worth should have been treated as a film studio. Netflix has also kept...

    Netflix has always been a fascinating case study. Because it was trading as much as a tech company, when in reality it's worth should have been treated as a film studio.

    Netflix has also kept acting like this is still 2015/2016 and they're the only game in town. That they could raise prices and people wouldn't cancel their subscription because what other streaming services existed back then? Hulu and Prime? They don't have the IP of other companies that now have streaming services of their own. They don't have other revenue streams like those companies do.

    Their business model of burn as much money as you can, make as much content as you can, was never sustainable. They couldn't endlessly keep adding subscribers. They couldn't infinitely borrow money.

    It's interesting stuff. I don't know what the future of Netflix looks like, but it doesn't look good.

    Edit: Netflix Animation has been dissolved maybe not as a direct reason for this. But it looks like Netflix will be tightening up.

    17 votes
    1. AugustusFerdinand
      Link Parent
      As should be well apparent by now, stock price does not denote the health of the company. And honestly, it's all overreaction and gambling in this age of instant news. Netflix lost 700,000...

      As should be well apparent by now, stock price does not denote the health of the company. And honestly, it's all overreaction and gambling in this age of instant news. Netflix lost 700,000 subscribers from Russia alone, without Putin's war this wouldn't be news. They missed revenue expectations by $60M (which is nothing when your revenue is nearly $8B) and they still have a NET income of $1.6B.

      As with all of the headline grabbing stocks, Netflix is disgustingly overpriced and needs to drop significantly to reflect the actual value. It's not worth the $200 or so it's trading at now just as it wasn't worth the nearly $700 it was trading at back in November. These news organizations just like the clicks that "news" like this brings.

      22 votes
    2. [6]
      Akir
      Link Parent
      I've always thought that the biggest problem with Netflix - from a business perspective, at least - is that they aren't one of the big five content owners. That's a major liability for them...

      I've always thought that the biggest problem with Netflix - from a business perspective, at least - is that they aren't one of the big five content owners. That's a major liability for them because they don't have a large pool of older properties they can 'revive' for new generations by simply making them available again, nor do they actually own the big name shows that people were already familliar with before they were a thing. This is a huge disadvantage - When Disney Plus first launched, that was almost entirely what they offered!

      And I agree, it's stupid to treat them as a tech company. Heck, I don't think it's fair to treat tech companies they way they are either - infinite growth is unsustainable no matter what market you're in. This drop in price is just another case of stupid investors making stupid decisions, and I'm almost certain that this is going to have negative effects in the near future.

      For what it's worth, I don't think that Netflix has a problem with the type of content it produces. They are perhaps the most data-oriented entertainment company in existance, so I highly doubt they're having an actual problem with viewership. The current downturn in subscriptions is likely more due to delays in production for their shows which means that people weren't happy to be kept waiting for the stuff they wanted to watch.

      I think the real problem that they have to watch out for is that people have expectations for them that they cannot possibly meet. So many people have this strange idea that Netflix is supposed to have everything they would ever want to watch. Many people also seem to blame them when whatever popular sitcom is taken off and added to a competing streaming service. In the meanwhile, there is an understanding among literally every other streaming video service that old stuff isn't enough to encourage people to keep subscribing, and that's why every single one of them are making original content. And that's where Netflix stands head and shoulders above all of the competition; they are not only making the kind of shows that the old guard wouldn't even dream of (The Floor is Lava and Is it Cake? are pretty good examples), they are also taking advantage of their international productions by making them available outside the market they were originally designed for. That's why I'm optimistic about where they are going.

      10 votes
      1. [5]
        vord
        Link Parent
        I mean...yes. That's what Netflix essentially was back in the day. The streaming service paired with DVDs by mail meant that you essentially had access to anything and everything for one low...

        So many people have this strange idea that Netflix is supposed to have everything they would ever want to watch. Many people also seem to blame them when whatever popular sitcom is taken off and added to a competing streaming service.

        I mean...yes. That's what Netflix essentially was back in the day. The streaming service paired with DVDs by mail meant that you essentially had access to anything and everything for one low monthly cost.

        But now rates are almost double. Selection is getting worse...or rather streaming has become cable again. "Competitors" cropped up, though I use that term loosely. If you have a monopoly on the content availability (Disney most egrariously), you're just walling off your content and forcing yourself into the market. Advertising is creeping into paid streaming, which is kinda gonna cause piracy rates to skyrocket.

        What we need is a law akin to the 1948 Hollywood theater ownership ban, which was also recently scrapped. Or perhaps a compulsory standardized licensing costs, which would prevent that monopolization.

        Would anybody use Disney+ if their content was available on any other platform? I certainly wouldn't.

        7 votes
        1. [4]
          Akir
          Link Parent
          But Netflix has always had to pay extra for streaming rights and their streaming selection was always paultry when compared to their DVD selection. The notion that you could stream everything on...

          But Netflix has always had to pay extra for streaming rights and their streaming selection was always paultry when compared to their DVD selection. The notion that you could stream everything on Netflix was never real. There was always a ton of content that you had to check out on DVD or do without.

          While I agree that the way Netflix handled the price changes wasn’t the best transition, I also think that people are kind of crazy to think that it isn’t warranted. A huge chunk of that price increase is simply to get back the money they had been losing to inflation.

          I’m honestly getting really tired about people complaining about the different streaming services popping up because frankly it just makes them sound unjustifiably entitled, selfish, and short-sighted. Yes, it does suck that the stuff that used to be under one roof has moved. But at the same time, you have already had a long time to enjoy it, and if it was so important that the owners are recalling it to put on their own platform, chances are you could have bought the blu-ray collection by now to enjoy it infinitely. Streaming is by ephemeral by nature.

          Besides that, media is by nature semi-disposable. Our brains are constantly looking for new stuff, and that’s what everyone complaining completely disregards. The rise of streaming services has meant that the demand for original programming has also exploded, meaning there is a huge amount of great high quality entertainment available. Just look at Apple TV+, where they have zero legacy content - everything they have is new and original! I can completely understand wanting to go back to something old and comforting but it’s such a waste to fixate on the old stuff when there is so much new and exciting art being made.

          I will give you that I am really pissed at how many of them are trying to bring back advertising. Advertising is the devil (I have been slowly coming to the opinion that it’s actually immoral) and if I am to pay for content I better not have to deal with their mental assault. Heck, even if it’s free I’m going to look for a way to disable the ads.

          4 votes
          1. [2]
            vord
            Link Parent
            Sort of. Yea, I could do that. But then I need another device and have to dedicate space to holding a bunch of 1's and 0's gathering dust. Can't easily play it on my phone or laptop. Can't legally...

            chances are you could have bought the blu-ray collection by now to enjoy it infinitely.

            Sort of. Yea, I could do that. But then I need another device and have to dedicate space to holding a bunch of 1's and 0's gathering dust. Can't easily play it on my phone or laptop. Can't legally format-shift (in USA).

            So I just pirate instead. With all the difficulty of typing in the show name, I have a permanent copy that I can stream to any device, don't need to store in my house, and don't need to be always-online to use.

            6 votes
            1. Akir
              Link Parent
              To be perfectly honest, I think when it comes to video, piracy is completely acceptable. The industry has literally made it impossible to exercise your full rights because you have no legal choice...

              To be perfectly honest, I think when it comes to video, piracy is completely acceptable. The industry has literally made it impossible to exercise your full rights because you have no legal choice to buy it without DRM.

              11 votes
          2. imperialismus
            Link Parent
            At least internationally, this was kind of how it started. When Netflix launched in my country, it was the only streaming service available that wasn't the national broadcaster, and the national...

            The notion that you could stream everything on Netflix was never real.

            At least internationally, this was kind of how it started. When Netflix launched in my country, it was the only streaming service available that wasn't the national broadcaster, and the national broadcaster pretty much only had domestic programming. So the only alternatives were piracy or the 'Flix. It was basically a one-stop-shop for all legal international shows and films, everything else was at best torrents or shady porn-ad-infested illegal sharing sites. Since then, it feels like half the content/IPs available on Netflix then have disappeared to ten different streaming services, some of which aren't even legally available here. And at least half of the new stuff as well.

            It's not anyone's fault. It's not Netflix's fault that other media companies started demanding outrageous fees or outright refusing to renew licenses. It's not the media companies' fault that they realized they could make more money with their own streaming services and did so. And it's not the customers' fault that they were conditioned to the idea that all streaming content would be available either on Youtube for free or Netflix for exactly one reasonably priced monthly payment. But it certainly is a problem for Netflix as a company that, in many markets, they were the only company filling a certain niche and now that niche is filled with ten different companies and they're fragmenting the subscriber base.

            4 votes
  2. [10]
    EgoEimi
    Link
    I observed a few things in the past several years: Netflix's product innovation has stagnated. The UX hasn't fundamentally improved or expanded. Other streaming platforms have been rapidly...

    I observed a few things in the past several years:

    1. Netflix's product innovation has stagnated. The UX hasn't fundamentally improved or expanded. Other streaming platforms have been rapidly reaching UX/tech parity with Netflix.

    2. Older films are moving off-platform. Netflix Originals are taking up a greater share of content. A few Netflix Originals are interesting, like Bojack Horseman; most are cheaply produced background TV, I find. I think it's not feasible for Netflix to rely on original content to satisfy all its subscribers.

    11 votes
    1. [5]
      lou
      (edited )
      Link Parent
      I'm not sure how relevant this is. From all paid streaming services I've used, Netflix has by far the best user interface and experience. It's not even close. The only one that's better is...

      Netflix's product innovation has stagnated. The UX hasn't fundamentally improved or expanded. Other streaming platforms have been rapidly reaching UX/tech parity with Netflix

      I'm not sure how relevant this is. From all paid streaming services I've used, Netflix has by far the best user interface and experience. It's not even close. The only one that's better is YouTube, but that's a "free" service.

      Other services may have more (useless?) features, but Netflix is extremely reliable, works every time, and works fast. I greatly favor simplicity if it comes with consistency.

      9 votes
      1. [4]
        EgoEimi
        (edited )
        Link Parent
        I agree that Netflix is extremely reliable and works fast. But the gap between Netflix and its competitors is closing quickly and is no longer a key differentiator, I think. I see that there are...

        I agree that Netflix is extremely reliable and works fast. But the gap between Netflix and its competitors is closing quickly and is no longer a key differentiator, I think.

        I see that there are untapped areas:

        • Social features
        • Expert curation (not only recommendation algorithms)
        • Deep filters (by decade, director, prize, etc.)

        I've found myself watching a lot more Criterion Channel these days. Its UX is better on the curation and exploration front. Their various themed collection features makes it very easy to explore related films: collections for Hitchcock, Afro-Futurism, Cannes '68, and more. They're often human expert-curated. Whenever you strike gold, Criterion Channel leads you to a gold mine.

        I find that Netflix's algorithms recommends films based on very tenuous connections: you like this space sci-fi show, so here's this other show that's totally crappy... but it's also fictional and in space, how about it? Eh eh?

        I think sometime I might make a mock up to share for what sort of new features could be possible.

        7 votes
        1. lou
          Link Parent
          Criterion sounds nice. It doesn't exist in my country. A lack of social features is a bonus to me. Netflix algorithm kinda works for me. Expert curation sounds ideal for something like Criterion,...

          Criterion sounds nice. It doesn't exist in my country. A lack of social features is a bonus to me. Netflix algorithm kinda works for me. Expert curation sounds ideal for something like Criterion, I'm not sure you can scale that for something like Netflix. In any case, I don't really care about streaming services recommendation all that much. My sources of recommendation are basically my friends and IMDB. Having the video play less than a second after I hit play is much higher on my list of priorities.

          3 votes
        2. [2]
          Akir
          Link Parent
          Could you name some of those afro-futurism movies? I'm a bit intrigued. I don't have the Criterion Channel, but my university has their content through Kanopy.

          Could you name some of those afro-futurism movies? I'm a bit intrigued. I don't have the Criterion Channel, but my university has their content through Kanopy.

          2 votes
          1. EgoEimi
            Link Parent
            This is their Afro-Futurism collection: https://www.criterionchannel.com/afrofuturism Their other collections are worth checking out. It feels like a genuine adventure browsing through Criterion,...

            This is their Afro-Futurism collection:

            https://www.criterionchannel.com/afrofuturism

            Their other collections are worth checking out. It feels like a genuine adventure browsing through Criterion, getting peeks into worlds I never knew existed.

            2 votes
    2. [4]
      babypuncher
      Link Parent
      I think it is, but the quality of that content needs to improve substantially, or the price needs to come down to reflect the fact that most of this content is background noise. Hobomax is killing...

      I think it's not feasible for Netflix to rely on original content to satisfy all its subscribers.

      I think it is, but the quality of that content needs to improve substantially, or the price needs to come down to reflect the fact that most of this content is background noise.

      Hobomax is killing it right now with more consistently good content for a lower price than Netflix. Reed Hastings needs to focus on making their value proposition competitive with the other streaming services, and he can do that by either dropping the price or making better content.

      3 votes
      1. [3]
        EgoEimi
        Link Parent
        I noticed that HBO Max has been carefully investing in some spectacular flagship shows. I also noticed that Netflix has been investing in content with a VC "Black Swan Farming" mindset where...

        I noticed that HBO Max has been carefully investing in some spectacular flagship shows.

        I also noticed that Netflix has been investing in content with a VC "Black Swan Farming" mindset where they'll fund almost anything—a show about cakes disguised as not-cakes, a whole documentary on Abercrombie and Fitch?—but then drop it after a season unless it does very, very well.

        5 votes
        1. [2]
          MimicSquid
          Link Parent
          That strategy makes it hard to care about any series, though. If most will die in the cradle, why get attached? And if I'm not getting attached, why bother watching it?

          That strategy makes it hard to care about any series, though. If most will die in the cradle, why get attached? And if I'm not getting attached, why bother watching it?

          5 votes
          1. vord
            Link Parent
            To be fair, a lot of contest-style cooking shows are all kinda samey to begin with. I think a lot of better TV is happening merely because the expectation of everything being a mega-hit is going...

            To be fair, a lot of contest-style cooking shows are all kinda samey to begin with.

            I think a lot of better TV is happening merely because the expectation of everything being a mega-hit is going away a bit.

            At least now we get to see a bit more of them before they are killed off as a pilot.

            3 votes
  3. [2]
    Micycle_the_Bichael
    Link
    Alright, I tried. I tried really hard to stick it out with streaming. I’m finally done. Anyone know a good site/app for discovering new shows? The only thing Netflix has going for it at this...

    Alright, I tried. I tried really hard to stick it out with streaming. I’m finally done. Anyone know a good site/app for discovering new shows? The only thing Netflix has going for it at this moment is that it makes discovering new shows easier than pirating, where I need to know what I want to watch in advance. If I can get over that bump I’ll be free to cancel. Bonus points if it can suggest Korean and Chinese shows.

    4 votes
    1. cfabbro
      (edited )
      Link Parent
      I’ve been using Trakt.tv for years to track my viewing history, make watch lists, get notified of new episode releases for shows I’m watching, and for show/movie discovery. It has a pretty...

      I’ve been using Trakt.tv for years to track my viewing history, make watch lists, get notified of new episode releases for shows I’m watching, and for show/movie discovery. It has a pretty comprehensive set of filters that allow you to really hone in on what kind of show/movie you feel like watching, that includes filtering by country of origin and original language too. So it should fit your criteria.

      3 votes
  4. [3]
    Akir
    Link
    Hey, so remember how I was all defending Netflix's decisions here a while ago? Chances are next year they'll be dead to me. I'm trying to figure out which shows I'll need to pirate to keep access...

    Hey, so remember how I was all defending Netflix's decisions here a while ago? Chances are next year they'll be dead to me.

    I'm trying to figure out which shows I'll need to pirate to keep access to them. Voltron, She-Ra, Violet Evergarden, Beastars, The OA... what else am I missing?

    1 vote
    1. [2]
      cloud_loud
      Link Parent
      There will still be an ad-free option. HBOMax and Hulu offer the same thing.

      There will still be an ad-free option. HBOMax and Hulu offer the same thing.

      4 votes
      1. [2]
        Comment deleted by author
        Link Parent
        1. cloud_loud
          Link Parent
          The idea would be the current price is the ad-free version and a cheaper price would be established with ads. HBOMax launched with only an ad-free version that cost like 15 dollars a month. A year...

          The idea would be the current price is the ad-free version and a cheaper price would be established with ads. HBOMax launched with only an ad-free version that cost like 15 dollars a month. A year after they launched in 2021 they began offering a ten dollar a month plan that had ads. Another difference between the two was that the ad-free version had access to the day and date films that were still in theaters.

          Disney Plus also plans on offering an ad-supported tier at a lower price.

          Ads have always been a big part of television's revenue system. Broadcasters and cable basically relied on that money. Revenue based on subscriptions were never going to match what you could make with commercials. Netflix was always stubborn about never having ads but now they don’t really have much of a choice.

          3 votes