Streaming services hit a wall ?

[eastmen]

It's been an interesting week

We have CNN+ lasting only 3 weeks like a wet fart in the wind

As the video said they have more subscribers than CNN+. Now I think CNN+ is tied to the fate of CNN and how its in a drastic decline . I also think this would have been better to have started life integrated with another streaming service and not its own thing

Cnn + cost 300 million on start up and advertising. People are getting laid off with 6 months severance and first dibs on other jobs in cnn.

You also have netflix lossing subscribers for the first time in 10 years
https://variety.com/2022/tv/news/netflix-loses-subscribers-q1-earnings-1235234858/

They lost 200k and are expecting to loose another 2 million in Q2 their stock is currently on fire


Then you have Warner and Discovery merging which killed off CNN+ but leaves them with HBO+ and Discovery+ . So at the end of the day all 3 may just get merged into one subscripition.

What does everyone think ? Are we looking at a simple reshuffling of the industry or a complete collapse ? It used to be you'd get Netflix and have a ton of shows from all companies and maybe grab hbo+ and be done. Now there are a dozen or so subscription services. There are like 3 horror movie / tv show streaming services which i find insane.

 

[tuna]

People have realized you only have to pay when you are actually watching stuff.

 

[Silent_Buddha]

What I find amusing is that Netflix losing 200k subscribers when they have 221.84 million subscribers is inducing panic selling of their stock. That's less than a whole whopping 0.1% of their subscriber base. The 2 million is certainly more concerning but that's still less than 1% of the subscriber base. And since this is the first time, there's no real way to know if this is just a bump or something more sustained. If it's more sustained due to competition, then the question is where will it level off?

But seriously, panic over losing 0.1% of current subscribers? Yeesh.

Also keep in mind that the only reason they lost 200k subscribers was due to the Russian invasion of Ukraine. They cut off 500k Russian subscribers. If not for the war, they would have gained 300k subscribers.

Sure, when compared to Netflix's forecast of 2.5 million new subscribers or analysts predictions of 2.8 million new subscribers, it's certainly disappointing.

So from a continued growth perspective, yes, it's disappointing. But then it was unlikely it was going to continue to grow in large numbers indefinitely.

Also, are they even considering that a large part of the growth spike that hit at the end of 2019 and start of 2020 was due to covid lockdowns and people having nothing else to do while locked up? And now that people are able to get out again, there might be people that joined during covid lockdown who might now be cancelling their subscriptions because they can go out again?

Bleh. I'd wait to see a prolonged decline before panicking as many shareholders appear to be doing. If it drops below pre-covid numbers, then it'd certainly be something to make note of, IMO.

Regards,
SB

 

[pcchen]

One of the problem with Netflix (and others) is that Netflix has been increasing the production cost of new TV shows and movies, but there's no clear reason why that's beneficial to Netflix.
So basically Netflix is spending a lot money on making better contents (arguably, but let's assume higher costs generally lead to better results), with no clear "big return" in sight. I think that's the main problem.
On the other hand, with the recent crash of Netflix's stock price, it looks quite cheap now. Forward P/E ratio is less than 20, so if one look it as a boring "stable" stock it's actually relatively cheap.

This is not an investment advice, of course.

 

[Deleted member 11852]

So basically Netflix is spending a lot money on making better contents (arguably, but let's assume higher costs generally lead to better results), with no clear "big return" in sight. I think that's the main problem.

Isn't is to attract/retain people with high quality content like The Witcher, along with what aren't terrible Netflix Original movies? Netflix need to compete with HBO and Apple TV so can't churn out crap endlessly. I'd argue there is still a lot of crap on Netflix, but equally there is a lot of really good content too. Their anime selection isn't half bad.

 

[pcchen]

Isn't is to attract/retain people with high quality content like The Witcher, along with what aren't terrible Netflix Original movies? Netflix need to compete with HBO and Apple TV so can't churn out crap endlessly. I'd argue there is still a lot of crap on Netflix, but equally there is a lot of really good content too. Their anime selection isn't half bad.

It's true, but the problem is the cost is just too high. To be fair it's probably not started by Netflix (HBO is probably the main culprit), but Netflix is certainly helping it. For example, it's estimated that the per episode production cost of the Witcher is around US$10 million. A decade ago this is enough to produce a small movie.
Either way these streaming services are now in a production cost war, where different services such as HBO, Amazon Prime, Netflix, and Disney+ are all upping the game and the costs are ballooning. I don't know how long this is going to last, but judging by Netflix's stock price it's probably not going to be long.
Personally I'd like to have more diverse selections than focusing on some big budget productions. I'm pretty sure it does not cost anywhere near US$10 million to make one episode of Demon Slayer