NETFLIX Drops 46% In Streaming Wars

September 25, 2019

What if We Launched a Streaming Service?

So, Netflix (which closed at $264.75 per share today) is down 46% in their stock price as of Monday, and while we don’t give out stock tips — unless they’re from Boiler Room…or Wolf of Wall Street — we like to track our favorite “woke” streaming service as it potentially circles the bowl.

Who knew this billboard would be so serviceable for so long?

Netflix entered trading on Monday down 46% on the year overall, spooking investors, in the face of stiff competition from Apple, Disney, WarnerMedia and other streaming services entering the game with equally deep pockets.

Now, stock traders, and CNBC analysts who know more than you were fine with Netflix blowing through investor cash like an out of control coke addict when there was only one other competitor on the block, Amazon.

But now investors are losing confidence in their former darling, in light of original films not getting much traction, Netflix losing tentpole shows like The Office and Friends and overpaying for Seinfeld, and only showing a bright light by raising prices while bleeding domestic subscribers.

…And Everyone Else on the Planet Did as Well?

Speaking of those other competitors, what has the market rattled about Netflix is that they seem to have no “magic bullet” answer to navigating a world where Disney has deep pockets, multiple IPs across multiple genres, and a willingness to take risks that Netlfix can’t because they have 75 years of brand recognition and Netflix doesn’t.

It’s math Goblins. Simple math. Even you all can read a graph.

But don’t believe me, listen to the “wizards of smart” on CNBC in the clip below, while they drain your 401K and light up cigars with $100 bills off camera.

See.

I told you. The people with “real” power (not us schmucks who watch movies and write for this film site) are out of the Netflix game.

At least, as of Monday.

A 46% Drop Makes Netflix a “BUY”

If I were to advise you in any kind of way—and I’m not because I don’t do that—I’d say buy Netflix stock now, before it goes up again, and I’d say that for three reasons Goblin:

Netflix will fix its original IP “problem” in the mid-term and will eventually position itself in the long term as the HBO for the “Woke” Generation in ways that Disney can’t.

He’s got a special implant and the aliens are giving him instructions for what to do next.

Netflix’s Reed Hastings has proven to be quiet, savvy, and quite willing to throw money away on bets that look stupid short-term (i.e. the Seinfeld buy) but that will make Netflix at least a recognizable brand in the long-term.
Netflix has competitors with deep pockets—WarnerMedia, NBCUniversal, Disney+, HBO Max—and the ability to blow cash. But Netflix will benefit long-term from its enemies being traditional media companies while Netflix came of age in the streaming/Internet/on-demand era. And their competitors won’t be able to come up with an original idea to save their corporate lives. Case in point, look how HBO did Game of Thrones.

In Reed Hastings and Netflix, I trust.

But he better close a couple of deals pretty soon, or David Mamet will eventually be writing him into his next script about the days of the Great Streaming Wars of 2015-2020 as Shelley “The Machine” Levene.