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

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:

  • BobInIllinois: My observation has been that Xfinity/Comcast will compete on speed if the local market is competitive. If they are the speed leader already, they won...
  • Josh: It's not where I am. There's a Fiber company available that's both way cheaper and way faster. I've wondered if they're trying to compete with that....
  • BobInIllinois: Xfinity must have goal to be fastest broadband speed in its markets....
  • john: So can they merge digi tier 1 and 2 together now and keep it at $12 since they are removing like 8 channels from it and it's basically just a crappy ...
  • Josh: Nice! It's about time we get some good news!...
  • tim: Predicted cost for cable next year by November: $74.50 ( for the basic package, and when ever your beginning trial period ends with in the year of sig...
  • JACQUELINE SKIPPER: I have this problem with Spectrum. I would have to cancel and wait 3 months and I would if I didn't need my internet and the sabres games. they alway...
  • BobInIllinois: Frontier offers VantageTV in the Bloomington-Normal, Illinois area. They are competing with Comcast and MetroNet (a fiber overbuilder from Evansville...
  • L Nova: The DOJ should force AT&T to either sell OR spin off the unwanted copper wireline assets....
  • EJ: Do these "institutes" really think they are fooling anyone? This song and dance political moves is sickening at best. Most of these companies have dug...
  • jason: poor former Brighthouse members in a week it will be a year since SPP prices started for them. That means no one will be on the legacy first year pr...
  • jason: spectrum is on pace to be the worst cable company when it comes to speeds soon. They had no reason to remove the 200mbps option twc had. They will al...

Your Account:

%d bloggers like this: