Netflix -- April 21, 2022

Locator: 10010NETFLIX.

Updates

April 21, 2022: when the Netfliix story broke, the first question I suggested investors needed to ask -- where did they subscribers go? Now, we have some insight: Paramount and Apple. Google paramount apple stealing subscribers from Netflix. Note this, though:

• as recently as March 8, 2022, NextTV: Apple TV Plus had nearly five times more churn than Netflix in 2021. This does not surprise me: Apple TV+ has limited offerings, none of them, it seems, particularly appealing to Americans.
  

April 21, 2022: Netflix in one chart -- 

Later, 2:30 p.m. Central Time: timeline today --

• futures this morning and at the open, the market surged again.
• about 10:30 a.m. CT, about two hours into trading, it's reported that Bill Ackman sells his entire holdings in Netflix, losing $400 million:
• sometime after that announcement: the market tanks. Netflix loses another $7.00.
• "Go woke, go broke."
  

Original Post

Background: tracked here at "streaming wars."

A reader brought up something I had completely forgotten in reply to this note; and, here.

From a reader overnight:

Just read your analysis of the streaming services. I think Elon Musk has this one right...Netflix produces stuff that is unwatchable. Their focus on producing content for the Woke crowd has led to a mass exodus of subscribers who don't want to watch that stuff.

Producing stuff that the market doesn't want is a sure fire way to go out of business, deep pockets or not.

Woke content.

I had forgotten all about that. Years ago, Netflix was putting out some great original content, good enough that I was almost persuaded to subscribe to Netflix, but held off. Just too expensive for a couple of movies, or short series. 

 

But in the last two years, I haven't seen a trailer for one "Netflix original" I would want to watch. 

That was point one.

Point two.

Netflix is said to be considering some ad-supported content to help lower the subscription cost, or at least maintain. 

I subscribe to  The WSJ electronic edition. It's fairly expensive but the best at what it does and so I am willing to pay the subscription price. My biggest peeve: when I click on a video embedded in The WSJ and the "story" is preceded by a lengthy commercial. If I'm paying for a subscription, why are there ads at all?

Finally, third point.

Netflix says as many as 100 million folks watching Netflix may be using passwords from extended family members and/or friends. Netflix is said to be taking action to stop this "password sharing." Won't work. Why are folks sharing passwords in the first place? Netflix will simply lose viewers; these are not the kind of folks that will subscribe to Netflix.

By the way, that first point: woke content. Apple is doing the same thing. Too much "woke content." I subscribe to AAPL TV+ for two reasons: a) incredibly cheap, $4.99 / month and for the longest time, free; and, b) I want to keep up with what AAPL is doing. But even Ted Lasso -- I only watched parts of a few episodes. But Ted Lasso was one of their very few offerings that I would consider not part of the "woke culture."

By the way, I see the new Kardashian series is a "Hulu original." Out of complete boredom and some curiosity I watched the first episode last night. Better said, I tuned in to the first episode last night, but it was so incredibly awful I could only last ten minutes and it was background noise at that while I did other things. It may well have a huge following but wow, talk about self-absorbed; awful; Big Brother on steroids.

This is not my dad's Netflix, and that's how I got started with Netflix a decade ago when I first wrote about it. Netflix lost its way.

Bloomberg newsletter: Netflix has finally hit a wall. Where does it go from here? I will come back to this essay. On my way to take Olivia to school.