I doubt they'll go bankrupt, but they seem to have lost about 1 million customers due to the 60% price hike... sheesh.......
The DVD library is cheap and largely reusable. It cost something like 40 cents to round trip a DVD. At $8 month for the unlimited you had to watch about 20 movies for them to lose money on you- probably less when you account for the processing costs, etc. Most people I bet only watched 2 or 3. Very few watched more than that and I am sure their average was not 20/month/user. On top of that they had a throttling mechanism to slow down high volume users. High volume users had to wait longer for hit movies, etc. On the electronic side, it apparently costs them 3 cents (of bandwidth) to send you a movie, but consumption is higher and they have to pay licensing costs.
Not true. There are way more costs involved than you think. Copyrights for one. New movies last 1 year, back catalog 3 years, then they have to be replaced. Postage is probably 80 cents for a movie, so a subscriber renting 5 movies a month already took out half of the original subscription fee just in delivery costs...
To paraphrase my second boss out of college, "what's your point"? Too late to short for anything meaningful. No conclusive indication of support. And...........NO predicitve qualities toward BK. NONE. What's your point? Maintaining historical archives? Maybe you'd be better suited as a librarian. Why you could wear your hair in a bun. Lastly, there's still an UNFILLED gap. Where's the heavy volume? It's held by somebody. Gven the recent fanfare, I'll vote for the ax. Again, what's your point?
it is absolutely NOT too late to short this pos company....abreak of 125 this thing sees 100 in the blink of an eye...thats plenty for me
I wouldn't be too worried about gaps. Chart has many gaps and two island gaps from what I see at a quick glance. It's gonna leave more gaps.
Lots of gaps, but the focus is on the most recent. A gap is a synethetic price point established by the ax. It is not a toadstool that popped up at random.
Thanks. I read those articles and have started doing my own research. The accounts payable issue isn't a big deal. Nor is their method of calculating cash flow from operations. It's easy to adjust it as they are labeled very cleanly. Their accounts payable is really their upcoming content expenses (that they actually have to fork cash over for). It's exploding because their content costs are exploding. Can they generate enough revenue from customers to each month to pay for this large upcoming bill? That's the $130 question. It seems that the accounting, while appearing shady, isn't hiding anything that can't be adjusted properly by a financial analyst.
I don't see them close to bankruptcy, however, I no longer use them. I switched to Red Box which is just $ 1 to rent a movie since I don't rent that many movies. If the movies is really good I actually like to buy it instead. I like to watch HULU for streaming because its free on my computer. My issues with Netflix began when they started to charge separate pricing models for streaming vs DVD. The problem with streaming, is that you usually can't get new movies on streaming so even if you wanted to hook up a device to a TV, whats the point. Also, there are just not many movies that I like to rent so paying a monthly service to rent them, is not worth it. I think Netflix got greedy in a bad economy, and made a mistake on pricing. This was silly since normally if people are signed up for something, they will usually just not stop paying for it if the fee is small. Now they alienated their customer base, and lost a bunch of customers. Finally, I don't see any edge with streaming. Apple or Amazon can compete with them in the future. I could even see Hulu competing with them if they wanted to.
The ET link in my earlier post showed a comparison between Blockbuster and Netflix accounting. Originally Blockbuster used the same, faulty accounting but they changed it eventually, I think in 2008. That affected their bottom line too. Sooner or later Netflix has to adjust too. I don't think they raised prices out of greed. They were simply forced to do so, by the movie companies who are asking for bigger and bigger cuts and also starting their own similar services. Unless the international business takes off really well, I can see this only going down...