“Thank God we’re done with shrinking quarters!” The words of Reed Hastings on Netflix’s recent Q3 2022 earnings call. Whilst his relief is understandable after two successive quarters of subscriber losses, is he right to frame shrinking quarters as a thing of the past?
Well I bought a few shares for fun in the massive dip when they announced the squid game idea and am sitting on a 60% return (for now), so let's hope those days are indeed behind them. That said, the only reason I haven't cancelled my Netflix is the kids' demands. And Netflix have packaged the ad tier cleverly to minimise downgrade path for all but the most impoverished singletons. To your point about the games distribution problem - is Netflix overwhelmingly used on TVs? And if it is, how is that a problem? In our house Netflix is mostly all consumed on ios devices. I bet most parents have no idea how much attention kids are giving to those installed Netflix games, but they will when they want to cancel their sub - and the kids scream "no". Flash forward a few years when the market consolidates and attention gets even more fierce, games represent a good moat for Netflix, by which time they'll have presumably figured out the 'hub' problem. Interesting parallel/challenge there for Spotify with their Podcasts treatment.
Well I bought a few shares for fun in the massive dip when they announced the squid game idea and am sitting on a 60% return (for now), so let's hope those days are indeed behind them. That said, the only reason I haven't cancelled my Netflix is the kids' demands. And Netflix have packaged the ad tier cleverly to minimise downgrade path for all but the most impoverished singletons. To your point about the games distribution problem - is Netflix overwhelmingly used on TVs? And if it is, how is that a problem? In our house Netflix is mostly all consumed on ios devices. I bet most parents have no idea how much attention kids are giving to those installed Netflix games, but they will when they want to cancel their sub - and the kids scream "no". Flash forward a few years when the market consolidates and attention gets even more fierce, games represent a good moat for Netflix, by which time they'll have presumably figured out the 'hub' problem. Interesting parallel/challenge there for Spotify with their Podcasts treatment.