Home » Consumer News »Online Video »Video » Currently Reading:

Netflix Business Model “Not Remotely Sustainable;” Content Owners Can Make or Break Streaming

Phillip Dampier February 2, 2012 Consumer News, Online Video, Video 2 Comments
http://www.phillipdampier.com/video/Bloomberg Netflix Business Model Not Sustainable 1-25-12.mp4

Porter Bibb, managing partner at Mediatech Capital Partners LLC, and Kevin Landis, chief investment officer at First Hand Capital Management, discuss Netflix Inc.’s fourth-quarter results and outlook. Although results improved, a large amount of Netflix streamed content licensed from Starz will disappear this month.  More importantly, their long term business model is “not remotely sustainable” as programming acquisition costs continue to skyrocket, says Bibb.  Bibb and Landis speak with Emily Chang on Bloomberg Television’s “Bloomberg West.”  (6 minutes)

Currently there are 2 comments on this Article:

  1. Alex Perrier says:

    It would be nice if they let you pay per view, such as $1 for SD or $2 for HD, for those customers who don’t want to commit to a unlimited $8/month plan.

    • me says:

      There are services out there like that. For example Amazon is usually about 3 bucks per. With some stuff free if you use their prime stuff.

      Interesting view on the dynamic of what Netflix is up against. One dude is saying they have a nice customer base. The other is saying they do not have the cash going forward to buy more content. The more content is exactly what I hear from most people who have netflix. Lots of crap 80/90s b movies. Missing lots of blockbusters from years past. Hit or miss on latest blockbusters.

      Their mail business is fairly easy to understand number of discs shipped is a cost plus packaging (they do a lot by hand). Then subtract that from money in per customer. Limit the number of discs in and out and you are in the black.

      Their streaming business is a bit more difficult as there fixed cost is just bw per show (and how much they have colocated). The variable cost is what the studios are charging. Is it flat rate? Per view? Sounds like the are amortizing it across all viewers. So it becomes *way* more important the number of viewers you have. As you can then lower the per user cost and bully a little bit with I have x number of viewers who will no longer watch your show.

      If they went to a per pay per view model you would see some sort of point system or straight up limit of number of movies per month you can watch.

Search This Site:

Contributions:

Recent Comments:

  • Roman Lewyckyj: Phil, what do you think the chances are that Google Fiber will come to the Upstate NY area? Any at all?...
  • Houston: Very helpful. I called an pretty easily got my bill reduced by $60/month and a U300, 18Mbps and phone package. They also threw in a one-time $60 bil...
  • shunda Hawkins: Hello im experiencing the same results. We have enough people here to file a class action lawsuit!!...
  • Doom: Nice to see Rocky Miller openly whoring himself out to the telecoms against the people he's purporting to represent....
  • Oscar@SA: Come to San Antonio. I will help bury the cable in my area if needed, then I can go tell TWC to go you know where.. lol...
  • ssssssssssss: who want to make money online >>> http://adf.ly/wTP2i <<< after 3 mouth can you make almost 5 usd per day but after 1 year can youy...
  • John: Gah, they are putting up Google Fiber in NC and Georgia, but nothing in SC? Not even Charleston or Columbia or Myrtle Beach?...
  • BobInIllinois: So far, NO Google FIber in Big 10 country!!.....
  • Javier: Im having bad internet and phone signal with brighthouse for many years, I get disconnected from internet and my son xbox game is the same, technician...
  • Brian: I am an avid gamer who feels this pain as my speed drops to half (or less) during peak hours. Imagine my pain as only 10 miles away my friends have su...
  • Jason: Great article! I had U200, 18mps internet with 3 receivers, HD with no premium channels. I was paying $163/month and received a mailer from Comcast...
  • Limboaz: Figuring out how to stop the blatant corruption in Washington is one of the biggest challenges facing the American public. Frankly, crony capitalism s...

Your Account: