Netflix Again!

[MichaelB]

A reversal. From Reed Hastings blog (Netflix CEO) http://blog.netflix.com/2011/10/dvds-will-be-staying-at-netflixcom.html

DVDs will be staying at netflix.com

It is clear that for many of our members two websites would make things more difficult, so we are going to keep Netflix as one place to go for streaming and DVDs. This means no change: one website, one account, one password… in other words, no Qwikster.
While the July price change was necessary, we are now done with price changes.

This is looking more and more like a circus.

 

[TromboneAl]

And any publicity is good publicity.

 

[chinaco]

It does look a little amateurish.

But the space is changing. The effects of their announcements and their changes along with their competitors responses may have made things look a little different.

In the end... the DVD business is either a drag on them that they needed to get rid of or a cash cow to fund other future opportunities.

IMO - There is a business advantage to being the entire (or broad) entertainment solution... rather than pushing customer (DVD only) out the door.

Plus, if quickster were really a spin-off (and not just a subsidiary company) there would probably be a no compete period... after that they could compete with netflix in the streaming business.

Or... they could be finding that the combined businesses give them more scale to negotiate better deals with video suppliers.

 

[JPatrick]

The stock market is screaming ahead--Neflix falls to new low for the year--
DON'T FIX IT IF IT AIN'T BROKE.

 

[ziggy29]

Two words: New Coke.

 

[JPatrick]

Two words: New Coke.

Right on..

 

[obgyn65]

I agree. I stopped Netflix online streaming last month and went from 3 movies at a time to 2.

This is looking more and more like a circus.

 

[ziggy29]

The stock market is screaming ahead--Neflix falls to new low for the year--
DON'T FIX IT IF IT AIN'T BROKE.

It certainly doesn't do much to instill investor confidence in their management or its marketing decisions...

 

[Mulligan]

I agree. I stopped Netflix online streaming last month and went from 3 movies at a time to 2.

+1 - Their price increase actually saved me a couple bucks. I dropped the stream that I never used and just have a one at a time DVD plan.

 

[arebelspy]

I totally cancelled my account.

At least they're starting to listen to their customers. Better to be wishy-washy with happy customers than stubborn with unhappy ones.

If they improve their streaming content available, I'll reopen my account at that point.

 

[tangomonster]

+1 - Their price increase actually saved me a couple bucks. I dropped the stream that I never used and just have a one at a time DVD plan.

Me too! And so far it's working out---could always get a Red Box movie for $1 or up the plan to 2 at a time.

But----I will admit that I overreacted. I used to think nothing of paying $4 for a movie at Blockbuster----and would get 4 a month. Had to get it back on time, drive to get it, drive to get it back---so Netflix really is a bargain when you think about it...

 

[Brat]

Maybe I am absolutely out of touch but with all the free content on cable or the inter-net why spend money on this stuff Of course I am a charter member of the Ozzie & Harriet generation so may be clue less.

 

[Animorph]

Kind of like Netflix is the anti-Apple. They know how to make all the wrong moves. Very luckily I sold all my Netflix stock before its plunge, though it was just a small amount. I wouldn't trust their management anymore after the streaming webpage changes and the fake-out split. And really, the new webpage bugs me more than the split.

 

[RunningBum]

Dish bought Blockbuster and is offering Blockbuster Movie Pass to its subscribers. $10/month for online streaming, one DVD at a time, and a few extra channels. I don't know how their streaming content compares to Netflix. If you're a Dish customer, it's worth a look.

 

[Hamlet]

I wish I still owned my Netflix. I owned it shortly after the IPO, and sold it shortly later when it doubled.

Even after the drop, the increase in price since I sold it easily makes selling it my largest investing mistake.

Kind of like Netflix is the anti-Apple. They know how to make all the wrong moves. Very luckily I sold all my Netflix stock before its plunge, though it was just a small amount. I wouldn't trust their management anymore after the streaming webpage changes and the fake-out split. And really, the new webpage bugs me more than the split.

 

[GregLee]

Two words: New Coke.

You mean that you can expect weeks of great publicity if you threaten to take away something your customers will testify to the world that they truly love?

 

[Nords]

Reed Hastings’s Net Worth Falls by $640 Million - The Wealth Report - WSJ

One of my favorite WSJ bloggers reports:

Netflix founder Reed Hastings owned 5.21%, or 2,815,982 shares, of Netflix stock as of April. Some of those shares are options, which he would have to exercise to sell.
If we do the math based on his ownership of the shares, his stake in the company was worth $858 million when the stock peaked in July at $304.79.
Today? Well, the picture is a little different. Netflix stock is down to $77.17, which means his stake is worth $217 million.
That brings his total loss in net worth to $641 million.
(Again, that number is likely inflated since we don’t know the strike price of the options. A Netflix spokesperson declined to comment on the personal finances of its management).

I'll bet he never expected to be part of this 1% club...

 

[JPatrick]

Reed Hastings’s Net Worth Falls by $640 Million - The Wealth Report - WSJ

One of my favorite WSJ bloggers reports:


I'll bet he never expected to be part of this 1% club...

Oh well, if nothing else, he probably got himself removed from "More Tax Buffet's" speed dialer..

 

[MichaelB]

He sold 5k shares per week for more than 2 years. Over the past year alone he has collected more than $50M. He has done better than most investors.

Why a founder and owner needs stock options is not clear to me, but the the BoD must see a benefit.

 

[Chuckanut]

I have yet to find a better deal than Netflix even after the price increase. DVD's delivered to my door. A huge library of movies, TV shows and documentaries that I can order from. A fine library of foreign films. All for about $18 a month.

I stopped my streaming account because 100% of what I want is on DVD, compared to less than 25% that is on streaming. I guess I don't understand the fuss about streaming since the offerings are so small compared to DVD's. And if the ISP's start capping usage, streaming will be in a world of hurt.

 

[Nords]

Why a founder and owner needs stock options is not clear to me, but the the BoD must see a benefit.

The theory among venture capitalists is that it encourages him to stick around after they start telling him how to run his company.

Of course this theory is espoused by a bunch of guys who are spending their own shareholder's money and have no idea how to run the entrepreneur's company in the first place.

 

[freebird5825]

The plot thickens...I received an email with a link embedded, which of course I did not click on.

I typed the URL in by hand and found an interesting site detailing a class action suit.

https://onlinedvdclass.com/

 

[JPatrick]

The plot thickens...I received an email with a link embedded, which of course I did not click on.

I typed the URL in by hand and found an interesting site detailing a class action suit.

https://onlinedvdclass.com/

I got that as well.
The suit is legit, but I gather the payout possibly would be less than a dollar, unless you are part of the law firm of course.

 

[SpencerM]

Large class actions suits are rarely worth it, except to the lawyers. There are many of them, even entire firms, that specialize in finding the next CA filing. This is because they get 'weight' from the large class which usually results in a large settlement. Companies go for it as a strict PR and financial decision. Sad really.

Another reason to thank goodness I don't practice law!

 

[MichaelB]

Well, Reed Hastings, Netflix co-founder and CEO, is now paying the price for making some terrible decisions and executing poorly. His stock option grant for 2012 is only $1.5M, as shown in the recently filed 8-K Netflix, Inc. - Current Report and the total option value for the 5 man executive team is $6.6M. This amount is only half of what Mr. Hastings received in 2010.

In other words, Mr Hastings will earn more than $1M in new stock options if he manages to lead the company to the stock price it had a year ago. Netflix shareholders must be paralyzed with joy.