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Netflix is absolutely profitable so no.
It’s technically profitable, but expensive at 100X those earnings.

They are also burning cash like they have money to burn.
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Netflix still hasn’t turned a profit, and is actually taking on more debt, so no.

https://s22.q4cdn.com/959853165/fil...2018/q4/01/FINAL-Q4-18-Shareholder-Letter.pdf

If you look at page 5, their net cash flow is still negative.
Technically, this is actually correct.

Although Netflix generates profit, the cash burn kills their free cash flow.
 
You are right, it’s profitable, but expensive at 100X those earnings.

They are also burning cash like they have money to burn.

Yeah rising costs no question, they will be ok though I think. They've shown that they can produce a hit with their original content and have a large subscriber base.

The problem for them is if content providers go down the Disney route and pull their content in lieu of their own services I dont know how that pans out though, consumers aren't going to want to subscribe to seven or eight separate services to get the content they want.


Netflix still hasn’t turned a profit, and is actually taking on more debt, so no.

https://s22.q4cdn.com/959853165/fil...2018/q4/01/FINAL-Q4-18-Shareholder-Letter.pdf

If you look at page 5, their net cash flow is still negative.

Cash flow and profit are two different things.
 
Yeah rising costs no question, they will be ok though I think. They've shown that they can produce a hit with their original content and have a large subscriber base.

The problem for them is if content providers go down the Disney route and pull their content in lieu of their own services I dont know how that pans out though, consumers aren't going to want to subscribe to seven or eight separate services to get the content they want.




Cash flow and profit are two different things.
But the cash flow being negative is a major problem.

Just look at the facts. The market values Disney and Netflix the same right now. Red flag.

Disney has owned content bursting out of their mouse ears, parks, resorts, consumer products, and the best movie studio. Disney is launching a streaming service this year. Disney makes nearly $13B a year in PROFIT (over 10X more than Netflix) and trades at 13X 2019 earnings.

Sure, Netflix has growth, but it needs it at 100X earnings. Netflix has a streaming service and a couple original shows, mostly licensed content. Licensing fees and development of new content is $$$. And guess what? That’s the entire business. No parks, no movies, No cable programming, no products, just streaming.

I know which one I’d rather buy here...
 
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All these different providers having their own content and streaming sevice charging different fees. I wonder if there is a company that can gather all these individual services and combine them into one package and charge one huge fee. Oh wait...
 
I seriously doubt Apple's streaming service will be of any interest to me. If it does not include live TV, as in 95% of the channels I watch (about 40-50), then I simply would not be interested. I hate the Amazon, Netflix, Hulu, et cetera models that have no live TV and only offer on demand for select shows and movies. I do love the Hulu with Live TV service that I currently use now that I cut the cable. Apple's service would also need a good cloud DVR system too. The big reason I likely will turn up my nose to Apple's service is it will have to be competitively priced, and we all know that is not likely to be the case from a company with such a long history of premium pricing for average products. Telling me their service is the best won't cut it, they will have to prove it and court me if they ever want my money again. I love Apple goodies, but they are now just too expensive, all about looks and form, and average to lackluster in functionality.
 
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But the cash flow being negative is a major problem.

Just look at the facts. The market values Disney and Netflix the same right now. Red flag.

Disney has owned content bursting out of their mouse ears, parks, resorts, consumer products, and the best movie studio. Disney is launching a streaming service this year. Disney makes nearly $10B a year in PROFIT and trades at 15X 2019 earnings.

Netflix has a streaming service and a couple original shows, mostly licensed content. Licensing fees and development of new content is $$$. And guess what? That’s the entire business. No parks, no movies, no products, just streaming.

I know which one I’d rather buy here...

Disney are one of the few with the clout to take their content off Netflix and make their own service a success, the other licence holders probably don't imo. That said what is Disneys highest grossing content these days? Star Wars? Where did that come from?

Either way comparing Disney with Netflix is a bit pointless, they are different companies and one is about 80 years older than the other, the comparison should be Netflix Original content vs Apples.

On the bold part..

A couple of original shows? They've had a string of hits with their original shows, its a major part of why the services has been so successful. House of Cards, Orange is the New Black and Stranger Things were all huge and there are several more.

No Movies? Did you miss half of the world talking about Birdbox recently? or them earning their first Oscar nomination with Roma?

The point is Abazigal is talking about the long term financial viability of one service vs another without actually knowing if one of the services in question is able to deliver content that anybody wants to watch. Netflix have proven that they can, Apple not so much.

Music Streaming services are different the content is largely the same across all of them, TV content that's a different thing.
 
Yet another US only service. How many years until it rolls out completely in Europe?
 
[]Couldn’t they just buy Netflix instead?

Is this what Steve meant when he said “I finally cracked it!” ?[/QUOTE]


No, Apple would be foolish to buy Netflix. Netflix is in a precarious financial position and future looks bleak. They continue to bleed money (over $2 billion in last couple of years) as their costs skyrocket amid ever growing competition. Their most popular shows, e.g., Friends, the Office, will soon be removed as other companies don't renew their licensing with Netflix.

Netflix is trapped in that they can't raise prices enough to keep up with its costs; yet, they only have subscriptions as income. In contrast, the behemoths they are already competing against ( Hulu, Amazon, Google, etc), and soon even more huge competitors (Verizon, Comcast, Disney, and Apple, etc.) coming on board have multiple sources of income and don't need video streaming to make money as long as it adds value to their offerings.

Apple doesn't need to spend many tens of billions of dollars to buy Netflix. All they would be buying is their catalog of original content (they can license same non-original content that Netflix can), which Apple can produce at a fraction of the cost of buying Netflix. The reality is that there isn't anything unique that Netflix or any of them are doing. Every one of these companies are bidding for the same actors, directors and producers. Apple is already ahead of where Netflix was when Netflix started producing original content.
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Netflix still hasn’t turned a profit, and is actually taking on more debt, so no.

https://s22.q4cdn.com/959853165/fil...2018/q4/01/FINAL-Q4-18-Shareholder-Letter.pdf

If you look at page 5, their net cash flow is still negative.


Indeed, negative cash flow has been over $2 Billion. People don't realize that Netflix is in a very bad position going forward and how rapidly their stock potentially could plummet.
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So the Apple TV Network will basically look and feel like the PG-rated Hallmark Channel. Except there are token rappers like Dr. Dre inserted in some of the shows.


Don't worry, there will be all the extreme gore, gratuitous sex and violence, etc., people can consume available elsewhere.

Why are people so hung up, if its true, that Apple doesn't want to produce that type of content? They aren't stopping you from watching and it's freely available in countless places. It's as though Apple has to produce some bondage show to demonstrate their bona fides. LOL.
 
There's been rumours that this will be free, but that doesn't sound likely to me. While we pay more for most things, when it comes to TV our costs in the UK are low and unless Apple can come up with something earth shattering, I just can't see many UK viewers signing up. But I'm looking at this from the viewpoint of it being another "Amazon Prime" or "Netflix". Perhaps Apple have something left field that will shake things up and make me think again? It will be interesting to see.

Looking from the outside at this early stage and before we know what's happening, I can't see me doing anything else other than sticking with Netflix and the UK free-to-air streaming services (especially the excellent BBC iPlayer).
 
Disney are one of the few with the clout to take their content off Netflix and make their own service a success, the other licence holders probably don't imo. That said what is Disneys highest grossing content these days? Star Wars? Where did that come from?

Either way comparing Disney with Netflix is a bit pointless, they are different companies and one is about 80 years older than the other, the comparison should be Netflix Original content vs Apples.

On the bold part..

A couple of original shows? They've had a string of hits with their original shows, its a major part of why the services has been so successful. House of Cards, Orange is the New Black and Stranger Things were all huge and there are several more.

No Movies? Did you miss half of the world talking about Birdbox recently? or them earning their first Oscar nomination with Roma?

The point is Abazigal is talking about the long term financial viability of one service vs another without actually knowing if one of the services in question is able to deliver content that anybody wants to watch. Netflix have proven that they can, Apple not so much.

Music Streaming services are different the content is largely the same across all of them, TV content that's a different thing.
First thing you need to realize about content is that it doesn't matter where it comes from. It needs to be acquired (so you fully own it) or created yourself (very difficult, very expensive).

Wow, a whole Birdbox and Romo? Give me a break, please. Disney literally has a hundred of those. Disney has TONS of original content, but also tons of content they just own because they bought it, Star Wars included.

There is no shame in it. Disney knows content is king. Not a platform. Not a service. CONTENT. You acquire or make it at all costs, or die. Disney owns....ready for this? Around 40% of the entire box office revenues.

Here is some of Disney's content that has made around $1B JUST at the box office and untold BILLIONS in consumer products, park spend, licensing fees, etc etc:

Avengers
Toy Story
Frozen
Pirates of the Caribbean
Star Wars
Incredibles
Iron Man
Beauty and the Beast
Captain America
Finding Nemo/Dory
Alice in Wonderland
The Lion King
The Jungle Book
Guardians of the Galaxy
Thor
Coco
Maleficent (Sleeping Beauty)

Oh, they also have content that never dies:
Cinderella
Sleeping Beauty
Dumbo
Pinnochio
Aladdin
Snow White
Winnie the Pooh
Peter Pan
Tangled
Frozen
Brave
Moana

They also just bought all of Fox which will include stuff like full rights to Avatar, the highest grossing movie of all time.

They own ABC, ESPN, Marvel, Pixar, Lucasfilm, Disney XD, Disney Junior, Disney Channel, ETC ETC ETC.

Disney also has parks all over the word to reinforce the brand and their TV/Movies/Merchandise grabs kids by the age of 6 months.

Netflix is a great company, but their valuation is insane, their cash burn is breathtaking and scary, and they make about 12 times less profit as Disney and are valued the same.

Netflix needs about 3249043 more Birdbox hits to even approach Disney. They also need subscriber growth and a loan.
 
Apple is already ahead of where Netflix was when Netflix started producing original content.

Except that Netflix has data on what is liked amongst their users and can procure content based on that data.

Apple has nothing so far in regards to this. Just because they all work with the same actors/producers does not guarantee a success. Apple has to play catchup here, and I'm sure they will learn that it's not only the actors/producers that matter, but also the content that appeals to their customers -- who probably have already bought into multi-streaming products.
 
I will never understand why cable cutting, but signing up for a service that’s basically cable. Help me out on this. Is it solely for the sports, awards shows, and competition shows? Sorry, truly curious.


Once you experience on demand streaming where there are no commercials, you won't ever want to go back to watching cable. Every time I am in a hotel room and turn on the TV, I am reminded how awful that experience is. Think about spending 33% of your time watching horrid commercials trying to manipulate into buying something. Think about the fact that when you finish watching that "hour" show, you've just spent 20 minutes watching commercials!
 
Neat! Love the new emojis and stuff too. Now, how about a Mac Pro for those of us who have been with you since the beginning and pretty much count on this stuff for our professions? Going on six years now since an update.

Sorry, but every time I read about fluff and phones while their professional side languishes, I get frustrated. Yes yes I know, it's not fluff (for some people anyhow).
 
Well Apple in launching it internationally not just for U.S.,Hulu and HBO are U.S. only,so in other countries there is still market for another service.
Also if they merge iTunes content into it,it’s gonna be worthwhile.
You could argue the same about Apple Music.
Absolutely, except even more so because at least the streaming TV services have original content, whereas the streaming music services all pretty much offer the exact same content in a different package.

I don't recall now where Apple Music was in the list of entrants into the market (Spotify, Prime, Google, Pandora, Tidal, etc.), but I'd certainly agree that there's very little value added by the fourth, fifth, tenth, etc. entrants into the market.

I guess it depends on what the content is. All of what you mentioned have their own specific content, so if one likes specific shows or movies, they'll use that service. Another option with good content that may potentially be free for iOS users is a win in my eyes.

"Free for iOS users" would certainly be an innovation and a differentiation that could make this worthwhile (if the content were any good). Do you have reason to believe that's going to be the case? I've not heard anything that would suggest that.
 
Except that Netflix has data on what is liked amongst their users and can procure content based on that data.

Apple has nothing so far in regards to this. Just because they all work with the same actors/producers does not guarantee a success. Apple has to play catchup here, and I'm sure they will learn that it's not only the actors/producers that matter, but also the content that appeals to their customers -- who probably have already bought into multi-streaming products.


LOL. Yes, with close to a 1.5 billion devices, and billions of downloads from iTunes TV shows, movies, etc., the millions of people pushing all of their TV viewing through Apple TV, the vast amount of industry data that is available for purchase and freely available, equates to Apple has "nothing" in regards to what people like to watch.

Sadly for Netflix, there isn't anything magical or unique in what they are doing to produce original content. It's simply a bidding war from now on. Example is last week's announcement that they had won a fierce bidding war for the RIGHT to finance and produce Ron Howards film "Hillbilly Elegy." Think about that. They had to pay $45 million for the right to pay many more millions to actually get it made. Apple, Amazon, Disney, etc., all could have won that bidding war but dropped out at some point deciding it didn't make financial sense. That's the Twilight Zone Netflix is trapped in. Massively increasing costs, but limited ability to raise prices to cover their costs.

You're right, there is no guarantee of success, witness the many flops that Netflix has produced, among its successes. Netflix is a well run company, and had the vision to get into streaming early, but simply has a likely untenable business model going forward and will likely have to be bought out to survive.
 
I feel like we’ve been talking about some sort of streaming service from a Apple since at least 2010. Maybe earlier. Back then, the opportunity seemed more glaring. Much like the handheld industry in the early- to mid-2000s, TV was a mess. The consumer was stuck with Big Cable. Now, the industry has evolved (a bit) - fragmenting in a way that at least offers the perception of control/options for consumers. Everyone now offers some sort of streaming aspect. I just don’t know what Apple could do in this space, that will be that industry-redefining moment. I feel like that window of opportunity has closed.

I could be wrong - wouldn’t be the first time. Interested to see what they have up their sleeve. Even being fully entrenched in their ecosystem (including being a satisfied Apple Music family plan guy), I can’t help but feel I’ll be underwhelmed this time around. Just can’t yet see what they could offer that would pull more money out of my wallet. Going to have to be something more than “original content.” Historically, convincing me to invest in their offering was one of their strengths. Almost a no-brainer. They had me wanting things I never knew I needed. But that ship has sailed. That magic has dwindled. That said, I’m open but skeptical. We’ll see.
 
I can't really say I've been interested in any of the new shows/films Apple is developing in the pipeline. Let's hope they do the same thing they did with Apple Music and have a free period to test the streaming TV service before we all start sinking money into it.
 
Who's asking for this? Seriously, who? I'm a big Apple fan and firmly in their ecosystem, but with Netflix, Prime, Hulu, HBO, YouTube, Disney (soon) and all the rest, do we really need another one? What void are they filling that's not already adequately covered ten times over?
Do you pay for those??
K.
Well, this is free.
Who wants a FREE high-quality streaming service w/ over $1 billion worth of original content in the 1st year alone?
Literally everyone.
 
It is gotta be at least $29.99 per month. Not Apple if it ain't more expensive than the other options!
 
Disney are one of the few with the clout to take their content off Netflix and make their own service a success, the other licence holders probably don't imo. That said what is Disneys highest grossing content these days? Star Wars? Where did that come from?
I would guess Marvel generates more money than Star Wars.
 
So just for my clarification - and I realize we may not know yet...

Is this going to be considered a streaming service like Netflix/Hulu/Amazon prime, where they strike deals with content makers alongside supplying their own content? Or, is it going to be a streaming service like Directv NOW, Hulu w/Live TV, Sling, PS VUE, etc?

Not interested in the former, definitely interested in the latter.
 
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