Pure Flicker

Yes, many of us enjoy it all the time, the pure and the flicker. Some of us (like me) have it 3-4 months a year, two around Christmas and two around summer. And there are who do not like it at all, or they settle around Disney, Hulu or Stan. They are all in a seemingly stand-off. They all vie for the same population. As such, members will shift. I wrote about it before, it was always going to happen. This time there is more and there are a few sources. Lets take a look at two of them. In this we have 9 News who gives us ‘Netflix loses more than $US60 billion in minutes as investors flee’. Here we see “Shares of Netflix are imploding after the company reported its first quarterly loss of subscribers in more than a decade. The report far underperformed expectations, worrying investors who had been betting that a handful of big tech companies would continue to grow at a rapid clip. What’s happening: Netflix’s stock dropped 30 per cent when the market opened on Wednesday, instantly wiping more than $60.54 billion off the value of the company.” It is merely one part, channel 9 also gives us “Netflix said it shed 200,000 subscribers in the first three months of the year, when it had been expecting to add 2.5 million”. Here we have the first issue. You see ‘it had been expecting to add 2.5 million’ based on what expectations? You see there are two parts here. The first is that the covid era is sort of ending (sort of is the best I can give you). As such people are now expected to work, they cannot stay at home watching TV, so as millions go back to work, they will slide their subscriptions. As such the adding of 2.5M is one part, the loss of 200K makes sense and both numbers are up in the air. We can end up anywhere between plus 2.5M and minus 200K. Neither bother me, so the loss of $60B seems like an overreaction. But then we have the second article by the Guardian giving us ‘No wonder Netflix is bleeding subscribers – it’s become the new cable’ and they give us “Netflix posited everything from the war in Ukraine to people sharing passwords. But what if the reason is much simpler – that Netflix just isn’t really making much people want to see any more? It’s been a long time since Netflix was the total package: the home of cherished sitcoms like The Office, buzzy dramas like House of Cards, the exclusive venue for cinematic events like Bird Box and all for less than 10 bucks a month. Now, as the streaming service’s value nosedives, the big question is: are you still watching? And if so, what exactly?” It is a fair question and the stage I predicted well over a year ago is now coming to pass. One year prescription, spread over three providers. That is the reality of cramped budgets and these so called analysts with their expectations should have seen that coming a mile away, I saw it a year ago in my article ‘Choice, can you choose?’ (At https://lawlordtobe.com/2021/01/09/choice-can-you-choose/) and there was another article. So the minus 200K is not too surprising and I do not understand the ‘scared’ investors. This was ALWAYS going to happen. But I am also not surprised. You see the statement “investors who had been betting that a handful of big tech companies would continue to grow at a rapid clip” shows us the American who is short sighted. The one who does not comprehend that markets saturate and as such they have this dumb believe that numbers can only go up. And until 5G is a national solution for a lot of countries this will happens and worse will happen when internet congestion starts biting, because that too will be a factor. As such I personally see the overreaction on Netflix as a storm in a teacup and only the scared investors can make it worse for themselves. 

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Filed under Finance, IT, movies, Science

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