
Netflix shares decline after reporting disappointing subscriber growth - osrec
https://www.bbc.co.uk/news/business-44854632
======
wgerard
Total anecdote:

Kinda sucks when shows leave Netflix and don't get replaced; half the appeal
of Netflix is the ability to quickly switch between Futurama and Always Sunny,
and more importantly to be able to watch those shows on a platform that
doesn't completely suck (FX's app has got to be one of the worst apps I've
ever used). When "Parts Unknown" was about to leave Netflix, I really
questioned whether it was worth keeping my subscription. It feels like it's
happening at an accelerated pace in the last couple of years.

The original content is good, and I realize that those shows leaving Netflix
is probably more about Fox/CNN than it is about Netflix, but still makes me
less interested in Netflix nonetheless.

~~~
ProfessorLayton
Another anecdote: I’d have cancelled Netflix a while ago if my family wasn’t
using it. Their UX has been on a steady decline for me:

\- Audio previews make it so I never want to browse for what to watch next. I
hate having to fumble with my tv/home theatre remote because of this.

\- If you leave it hanging, the previews count towards a watch! Wow. God help
you if you wanna make some popcorn.

\- Their sorts are always shuffled around, pushing whatever content is on
their agenda.

\- Im bilingual, and I can’t belive there’s no way to turn off captions for
some of their shows. I can’t watch a show like Narcos without having subs for
either English or Spanish. This might sound nit picky, but bilinguals aren’t
exactly edge cases, either (SV is full of bilinguals!)

I’ve talked to some of their UX designers, and data seems to rule all there,
so they wouldn’t be doing what they’re doing if it didn’t help them. But damn
it is infuriating. Crazy that my favorite netflix client is the one Apple
designed for them in the older Apple TVs

~~~
Spooky23
I share your observations, but wanted to add the their browsing system is just
bonkers.

Discovery is impossible — imo they overoptimize for engagement and make it
hard to explore the catalog. I find out about many new shows via PR placements
in newspapers.

~~~
scrooched_moose
I was completely out of stuff to watch about a month ago. No matter what I did
I could only get the same ~100 shows and movies that I'd either already
watched or had no interest in.

On a whim I switched over to my step father's profile - holy shit! There were
at least 15 movies I wanted to watch that I absolutely could not get to show
up on my profile without searching by name. I found a handful more on other
family member's as well.

If we weren't on a 5 person family plan I would have cancelled long ago
because from what they will show me there isn't any to watch.

~~~
FridgeSeal
And herein lies the issue with filtering/tailoring based on what you've
watched/liked before: it can never 'escape' and give you something different
that you might actually really like.

I don't know how many good titles I discovered browsing random titles in video
stores back in the day.

~~~
TeMPOraL
And it would be so simple to solve. Prepare a tailored list. Instead of using
it on all available space, fill only 90% of the space with items from the
list. Fill remaining 10% with random items that do not belong to that list.

~~~
Swizec
Yep this is how you’re supposed to escape from a local maximum. But maybe
Netflix’s usual customer doesn’t stick around long enough to have this problem
so it’s not worth fixing. I can’t imagine none of their machine learning
engineers know how to fix this.

~~~
TeMPOraL
Yeah, I bet they know. Question is, do their managers _want_ them to fix this?

There is this hypothesis that I've seen floating on HN at times, that Netflix
does this to hide the fact that their selection is very small. I'm not totally
convinced, but a lot of their UI choices feel like good evidence in favour of
this hypothesis.

~~~
prades
Thankfully there are alternative interfaces to browse the Netflix catalog:

[https://www.coollector.com/index.html#netflix](https://www.coollector.com/index.html#netflix)

------
axaxs
Netflix is in a weird position. Early on I loved it, but over time it seems
down to a few good originals and a lot of bad ones, and third rate third party
content. I haven't cancelled yet but probably will, as I rarely use it. I
don't blame Netflix for this necessarily, but it has made it's consumer value
much weaker. Internationally, there are much cheaper options typically.

As an aside, their taking of a political stance has led to a small but visible
American chunk leaving, or at least claiming to.

~~~
stingraycharles
Yes, I’ve also noticed that generally their original content isn’t very great.
I can see how this happens when you optimize for binge-watching, but it feels
like they just throw a lot of stuff against the wall and see what sticks.

I’ve recently got an HBO subscription and the difference in quality is
staggering.

~~~
shakestheclown
I don't like how they mark exclusive right properties as "Originals" when they
may not have made them. A lot of the quality of those exclusives is not great
compared to their actual originals.

------
volgo
Alternative headline:

"Netflix stock plunges to only +24% in 90 days"

~~~
scurvy
Sucks if you bought in this morning hoping for a big earnings surprise. (I
didn't, but I know those that did)

~~~
throwawaymath
Opening a position on the day of the earnings announcement is generally a bad
idea regardless of whether you’re right or wrong about the direction.
Volatility is effectively priced in at that point.

~~~
hueving
You're thinking of options, not stock. Stock price itself can't imply
volatility, it can only reflect market expectations of earnings.

~~~
throwawaymath
While _implied volatility_ is a feature of derivatives (and by extension,
options), the price of an equity does undergo volatility, particularly from
the heightened trading activity in anticipation of e.g. earnings. Volatility
is not restricted to the definition of implied volatility.

------
cncrnd
I hardly ever watched TV, but found myself binge watching Netflix. The on-
demand model is so much cleaner than regular TV where you have advertisements
being shown for almost 1/3 of the time.

In fact, I liked Netflix so much that I cancelled it because it was becoming a
distraction. If I have kids they definitely will not have access to any such
thing, and I feel sorry for the kids growing up with it today.

~~~
willio58
I get where you’re coming from but self control is an important thing to teach
children.

If your version of self control is fully disconnecting, I understand that but
it doesn’t mean you should feel sorry for kids that have access to Netflix.

(Speaking as a 21 year old who spent a number of years of my childhood
watching Netflix with my family)

~~~
cncrnd
I'm also in my early 20's.

I think children are by nature more impulsive, and if they have access to
Netflix at a young age without enough parental restrictions they might start
down a bad path. When they're older it's easier to contain.

That's part of the reason for age restrictions on drugs/alcohol. Some drugs
aren't all that different from dopamine inducing digital stimuli. The
prefrontal cortex, which is responsible for self control, isn't fully
developed until age 25.

~~~
krageon
The age restrictions on drugs (alcohol is also a drug) are because of
researched and profound effects on developing brains. It has very little to do
with undeveloped self-control (although that is definitely a thing). The
difference in effects on dopamine between drugs and anything that isn't a drug
is also profound, mainly because drugs will make things happen that simply
cannot happen normally.

I don't at all agree with your "children should not be exposed to things they
might want" premise, but that is a discussion for another day.

------
firasd
Here in India, Netflix costs ₹500/mo. Amazon Prime costs ₹999 for the whole
year. Both are much pricier compared to regular cable TV, which gives you
hundreds of channels for a few hundred rupees per month. So there's a
saturation point to at least some of their international expansion unless
incomes start rising more broadly...

Also, anecdotally, I only have so much time for 'prestige' TV. They cover
Delhi and Youtube in ads everytime they have something to announce--Altered
Carbon, which I watched, but then they had Lost in Space, Wild Wild Country,
and now a show set in Mumbai called "Sacred Games"\--while it's great for
subscribers to have a wealth of new material to watch all the time, there may
be an inflection point beyond which producing/acquiring more content doesn't
grow their audience...

~~~
Pxtl
Surprising how the ratio is so far reversed in India. Here in Canada (which is
a similar market to the USA), Netflix is the cheapest option. Cable TV is
several times more expensive for even a basic plan, and Amazon Prime costs
about the same as Netflix (but includes the other Prime services).

~~~
dukes_haven
Netflix would be cheaper in India too but you have to take into account that
not everyone can speak English there

~~~
Sebguer
Not only does this statement not make any clear sense (why does English
speaking #s affect price of the service?) but India has the second largest
English speaking population in the world.

~~~
gruez
>but India has the second largest English speaking population in the world.

irrelevant when that equates to 10% of the population.

~~~
Sebguer
Can you explain why it's irrelevant? It's unclear to me how market size is
impacted by the fact that there is a larger pool of people that aren't in the
market.

------
throwaway0255
With Netflix, there doesn’t seem to be any amount of seeing something and not
clicking on it that ever gets the system to stop showing it to me.

Every time I log in, there’s a big wall of 20 posters I’ve seen a thousand
times and never clicked on once and have zero interest in.

And the whole user experience seems about finding my way around that wall.

I can find stuff I’m interested in, but the platform never surfaces it for me.
I always have to dig.

I always use the feedback system, too.

Netflix always brags about paying mid-six in pure salary and hiring top of
market. Their internal presentations on content discovery and demography are
something people tell stories of like they glimpsed a magical relic or
something.

As a user I honestly cannot fathom where all that money and research could
possibly be going.

Maybe my account is broken or something.

~~~
zmmmmm
Heh ... same here. I'm baffled after all their supposed AI with competitions
and all, it actually sends me emails pitching me to watch shows that I already
watched end-to-end and finished. I couldn't think of a clearer or simpler
signal to an algorithm than "they already watched it" but apparently Netflix
isn't able to pull that off.

------
keithnz
I don't know if anyone else does this, but I subscribe to netflix for a while,
then I hit a wall of "nothing to watch" and new content that I'm interested in
dribbles out too slowly. So I unsubscribe and subscribe with a different
streaming service, and watch their content for a bit, then go to another, and
then eventually come back to netflix. If it's been long enough I also get free
trials for another month also :)

~~~
whoisjuan
There's a large percentage of users who won't go through all that trouble just
to find new content. Anecdotally I can tell you that there's a large
percentage of users who can re-watch the same series over and over (I'm one of
those people).

Netflix knows this so that's why they go great lengths to keep series like The
Office and Friends, btw, both owned by Comcast...so you can guess why Netflix
is cheering for Comcast to win that Fox bid...

------
Chazprime
It seems as if Netflix is focusing on quantity instead of quality
lately...their original content isn’t as compelling as it used to be.

~~~
wavefunction
Sacred Games and Secret City (among others) are far more well-done than most
other recent offerings from other providers imnsho.

Hulu has The Handmaid's Tale and HBO has Westworld but that's about it.

~~~
Reedx
HBO also has Game of Thrones, Silicon Valley, John Oliver, good documentaries
from time to time...

~~~
wolco
HBO is double the price and once you get through the best 15 series content is
thin. Netflix has so much variety coming out daily.

~~~
jandrese
HBO Now is so weird. I subscribed for a couple of months to watch Game of
Thrones and Westworld. I figured I might as well check out the rest of the
service too. HBO has many decades of original content right? There should be
tons of stuff to watch on there, but I could find barely anything. It was just
a light crust of the most current shows, whatever movies they were currently
licensing, and a few crumbs from the back catalog.

I ended up dropping the subscription because I'd watched everything
interesting on the service in no time flat. I could have been watching Tales
from the Crypt for months, but it wasn't available at all. Where is the Rey
Bradbury theater? Shows I'd heard about growing up but only got to see briefly
in a hotel room on a trip. For a service nearly twice as expensive as Netflix
they made seemingly no effort to keep me engaged.

------
warent
My girlfriend and I use Netflix to watch Star Trek, Chinese movies, and
Indian/Bollywood films. That's it. Honestly the UX has been steadily getting
better from my perspective and the film selection now is way beyond where it
was ~3 years ago. Maybe I'm an outlier? It didn't occur to me that it might be
an unpopular opinion to say that Netflix is actually good

~~~
wolco
I'm trying out HBO/Movie network. Once you get through 15 mostly goid series
the content gets very thin. For half the price netflix has more original and
unique content and provides more value at half the codt. I like the variety I
wish the UI promoted it a little better

~~~
aslkdjaslkdj1
HBO has a much better movie selection than Netflix.

~~~
voltagex_
In the US.

------
odnarupoque
One thing no one notices is DRM and lack of content on Netflix overseas... It
is nearly impossible to have Netflix on Chinese Android devices (thanks to
Widevine), which is a huge loss due to rapidly growing smart projector
market... who needs 480p on a 150'' screen??

As for lack of content: my family is trilingual, and we constantly moving
between countries. It's almost impossible to get content we like outside of US
(even Australia sucks), these unbelievably stupid and shortsighted ideas of
distribution regions (for DVD/BD) and DRM (for streaming) keeps me on torrents
for 20+ years already, and I see no end to this ordeal. I tried to "go legal"
on so many occasions, and EVERY SINGLE TIME I stumble upon some ludicrous "new
tech" that prevents me as a consumer to watch content I like.

When will the studios realize that ALL content is out there already? And
literally NONE of their effort since DVD css stopped anyone from "stealing"
anything.

I can get any movie/show from torrents in max quality, but I would like to
just pay $15 to someone and stream FullHD/4K content in any language to any
device, and finally stop pirating stuff. Too much to ask, Netflix?

Music industry learned this lesson hard way 10 years ago, unleashed unlimited
HQ streaming, and now look -- music piracy is nearly extinct, and both
listeners and industry are happy.

In the meantime, I'm filling my 4TB hdd with BD remuxes and enjoying 4k videos
w/o paying any cent to anyone. No other way around it for consumer, it seems.

------
dmode
I think the market overreacted a bit. They have been growing for so many
years, there is bound to be a quarter here and there where growth stalls.

Having said that, I feel Netflix's biggest problem is content discovery. They
have the best multilingual content that can be consumed globally like Narcos
and Sacred Games. Yet they make it really hard to find such content. Their
categorization is weird and not easily understandable. But what really bothers
me is that their content preview is just a short paragraph. So you are asking
viewer to watch 10hrs of content based on a short paragraph ? I would prefer a
lot more info about a particular show before I commit to it. Info such as
critics reviews, rotten tomato and IMDB rating, popularity in native country,
more detailed description of the show, similar shows, etc etc. Basically I
have to go ask r/television about a particular series or movie on Netflix
before I start watching. I am pretty sure this leads to a lot of user
frustration and ultimately cancellation

~~~
stingraycharles
The market reacted because it’s priced for perfection. Any bump in the road
will cause a reaction. Its PE was at 300 which is pretty insane.

------
foepys
When Disney will launch their streaming service in late 2019, Netflix will be
in deep trouble. If Disney is allowed to aquire Fox, they will have such a
massive (and exclusive) catalogue, that Netflix will simply be too expensive.
Netflix Originals are not too bad but also not exceedingly good and I
personally wouldn't pay 11€/mo for them.

~~~
fullshark
I'm betting Disney messes it up. They will be too married to legacy revenue
streams in DVD + Cable TV to really make their service worthwhile and eat into
Netflix's market share with an incredible deal for consumers.

~~~
kalleboo
They're also too obsessed with control and exclusivity. See their practice of
"vaulting" movies so they can re-release them every 10 years. It's basically
the opposite market strategy of streaming services that live on the long tail.
[https://en.wikipedia.org/wiki/Disney_Vault](https://en.wikipedia.org/wiki/Disney_Vault)

------
sebringj
What happened is streaming tech isn't niche to Netflix anymore. It became good
enough for HBO and Showtime etc etc of course Amazon so now you have a
plethora of stuff to watch and Netflix isn't the only game in town but they
will always be the original innovator. I hope they can innovate more and do
something fantastic.

~~~
cheeze
Game is only going to get tighter too. Now you have sports moving into the
streaming era, Disney launching something soon, etc.

The time of even more fragmented streaming offerings (and more selection) is
soon.

Comcast is an interesting study here too. They are pushing ip based linear TV
hard right now. I don't like the company, but they seem to know what they are
doing.

------
wesleytodd
Lol, down to 340. It was ~200 in January. So it is only up 60% this year.

------
calvinbhai
I think the growth stall in this quarter is the lull before the storm.

Netflix has enough India specific content in the pipeline, and only one of
these “made by Netflix” series has been released yet.

If there is one thing Netflix does good, it is the focus on content that is
relevant to the region, without compromising on the language and characters.

Another recent thing in India, is the plunging broadband prices in India,
especially wireless (4G LTE, 2 GB per day, for 89 days costs less than $10
<head explode?>).

Netflix, Amazon Prime and other streaming video options are going to get more
signups soon, especially from the younger population that may not have a TV at
home, but will certainly have a smartphone and/or a laptop. For them, Netflix
is certainly a cheaper option, especially if you divide monthly cost of the
top tier plan ₹800 by 4 = ₹200 which is certainly bang for the buck compared
to cable tv, that you can watch only at home.

The only disadvantage for Netflix is for those who prioritize watching sports,
which is still a major reason for people to subscribe for cable.

Until the recent price war on 4G/LTE/5G pricing (in early 2018) that has led
to dirt cheap wireless internet access, I thought Netflix in India was a wrong
move. With such cheap internet access, Netflix and other streaming video
platforms certainly have a huge growth phase from the next quarter onwards.

Watch out for Netflix growth numbers over the next few quarters in India. I'm
extremely bullish of Netflix in India and I'll be shocked if Netflix fails to
grow from here onwards.

------
redthrowaway
I'm curious about their decision to push original content as hard as they
have. In some cases, like comedy specials, it's a clear win. But their
original dramas are really hit or miss, and for every Altered Carbon you have
a half dozen utterly forgettable shows. It makes the "Netflix Original" badge
pretty meaningless as an indicator of quality, so I still have to wait for a
buzz to develop to commit to trying a show. I don't end up watching Netflix
nearly as much as I'd like to.

Also, the diminishment of the back catalogue (and the fact that so much of it
is SD--not their fault) is negating one of their biggest selling points.

~~~
jogjayr
> for every Altered Carbon you have a half dozen utterly forgettable shows

That's no different from regular TV. We were spoiled in the early years of
Netflix streaming because they could cherry-pick license all the good stuff
from earlier for cheap. Now they have to go on the same "fund a bunch of
stuff, discover some hits" journey that all the other content producers have
gone through.

On the plus side you can watch anything you want on demand, there are no ads,
and the website and apps are fast. And you don't have to pay $100/month for a
cable bundle with shitty customer service.

If there's some show or movie I'm really missing, my local public library does
a great job of filling that need.

------
pasbesoin
I'm finding significantly more to watch on (U.S.) Prime than Netflix
streaming, these days.

Even Netflix' premium original content is getting monotonous. Where it -- or,
more broadly, "Netflix" branded content -- is not simply getting stuffed full
of "quantity over quality".

I've been feeling like I should have pulled the plug, a while back.

And yes, per other comments here, someone needs to... "have a talk with" their
UI people. Not helpful, recent changes.

------
floatingatoll
What's the lower bound for their share price before they have to change how
they operate the business or suffer a penalty to net revenue? Or, if the stock
market goes offline for 365 days, would any particular harm come to them at
all?

~~~
saym
I believe their net revenue was still +40%. I think a slowing in subscriber
growth could prove to be temporary.

In general, they'd have to lose shareholder/board confidence in company
direction, which won't happen anytime soon.

------
dunpeal
An interesting question for me is whether Netflix will also experience a wave
of talent departures as an additional result of this stock plunge.

Netflix is competing for talent as a FAANG outfit, and as such much of the
value they provide to their employees depends on their RSUs. This works great
as long as stock price is on a steep rise, as has generally been the case for
FAANG over the past several years.

Now that the price is on a downslope, though, we should expect their
compensation package to be less competitive than other tech companies, and
especially FAANG.

Will they be able to deal with it somehow? Or will their top talent migrate to
more successful tech companies that can pay as well as Netflix did while its
stock was rising?

~~~
jogjayr
Netflix doesn't force employees to take RSUs. Every employee has the option to
take anywhere from 0-100% of their compensation in cash. [1] This was also my
experience.

1\. [https://www.quora.com/How-does-Netflix-compensate-its-
employ...](https://www.quora.com/How-does-Netflix-compensate-its-employees)

~~~
dunpeal
It's nice that employees have a choice, but presumably some of them did choose
to take stock (it would be pretty bad if none of them did), and they will see
a reduction in their comp as a result of this plunge.

Furthermore, the link you provided also states that since 2015, there's a
compensation factor that is non-voluntary and pegged to the price of the
stock, so _everyone_ will see a reduction, though some more than others.

------
voltagex_
Has Netflix dropped the bitrate on 1080p versions of shows? I don't remember
it looking this bad.

------
trophycase
Maybe because they keep adding stuff like autoplay trailers, intro skips, and
outro skips. Just play the damn TV show, stop trying to manipulate me into
watching more, just play it as made.

------
simonxia
chinese market should be considered :)

------
matte_black
Shit, this is really going to hurt my portfolio. A lot of other tech stocks
are down as well.

~~~
zwily
Did you just buy it yesterday? It’s still way up for the last few months.

~~~
matte_black
I actually bought it quite sometime ago, but that means I have a lot of
shares, and the more shares you have the more small movements in price start
to add up to real money.

Right now I’m down several thousands of dollars on NFLX, which could have
easily been a few international vacations. It’s not the first time or last
time stuff like this happens, but everything was rallying so nicely the past
few days it’s a shame to see that get back tracked. And of course, other tech
stocks are down with it which also adds to the pain.

~~~
klipt
Stocks are volatile. But if you're investing for the long term it doesn't
matter.

Just stick your money in Vanguard index funds and forget about it apart from
rebalancing once a year.

~~~
matte_black
I took that advice several years ago when I started investing, but a big
mistake I made was choosing a value fund instead of growth fund. Could have
got so much more.

