Here's a new RUDE awakening for Netflix subscribers

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Its not over for NFLX until it hits 0. This company's business model was a joke from the word go and only the help of wall street and the act of cooking their books took this stock on its incredible ride up. By my calculations they are near broke and they won't be able to meet their obligations in content deals in the next 12-18 months. There is a reason why they couldn't re-sign Starz and are now signing Osiris and Discovery re-runs as of late, ponzi scheme on its last legs.

The 12-18 months time frame was based on the revenues they were bringing in this year. Now with the price hike (again they are broke, this was sheer desperation) and ensuing subscriber exodus that time frame has likely shortened, perhaps considerably. The further decision to split their two businesses, streaming and dvds, has also caused a stir with subs and it appears they will lose another substantial amount.

Also Dish Network has announced a streaming product with details to be unveiled this Friday. I would assume they have something decent to offer but one can only speculate. IF they have come up with something that rivals Netflix the time frame until bankruptcy/scandal will be very short, perhaps just a few months.

*just a heads up Netflix is presenting at some Goldman Sachs event today at 2:55 est. Some rumor floated out there says Microsoft is investing in Netflix. Sounds like complete bs and makes no sense but just in case anybody is thinking of investing on the short side best to wait until after this presentation.
 

RX Senior
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I'd be sorry to see NFLX go under. I've received two CD's on Wed and two on Fri just like clockwork for years. My cost went down because I do not stream. Of course the post office is going to change everything. Guess everybodys needs are different.
 

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I dont even want to look up how much their CEO gets paid...........and his benefits......

He gets paid very well on the stock options alone. I checked today and Reed Hastings has been dumping the stock as quickly as he is allowed. Since early August, I counted 10 seperate filings for insider selling. This guy knew that the ship coming unglued and started dumping his worthless stock onto the public. Nice vote of confidence from the CEO.
 

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Got this email..




Dear ****

I messed up. I owe you an explanation.

It is clear from the feedback over the past two months that many members felt we lacked respect and humility in the way we announced the separation of DVD and streaming and the price changes. That was certainly not our intent, and I offer my sincere apology. Let me explain what we are doing.

For the past five years, my greatest fear at Netflix has been that we wouldn't make the leap from success in DVDs to success in streaming. Most companies that are great at something – like AOL dialup or Borders bookstores – do not become great at new things people want (streaming for us). So we moved quickly into streaming, but I should have personally given you a full explanation of why we are splitting the services and thereby increasing prices. It wouldn’t have changed the price increase, but it would have been the right thing to do.

So here is what we are doing and why.

Many members love our DVD service, as I do, because nearly every movie ever made is published on DVD. DVD is a great option for those who want the huge and comprehensive selection of movies.

I also love our streaming service because it is integrated into my TV, and I can watch anytime I want. The benefits of our streaming service are really quite different from the benefits of DVD by mail. We need to focus on rapid improvement as streaming technology and the market evolves, without maintaining compatibility with our DVD by mail service.

So we realized that streaming and DVD by mail are really becoming two different businesses, with very different cost structures, that need to be marketed differently, and we need to let each grow and operate independently.

It’s hard to write this after over 10 years of mailing DVDs with pride, but we think it is necessary: In a few weeks, we will rename our DVD by mail service to “Qwikster”. We chose the name Qwikster because it refers to quick delivery. We will keep the name “Netflix” for streaming.

Qwikster will be the same website and DVD service that everyone is used to. It is just a new name, and DVD members will go to qwikster.com to access their DVD queues and choose movies. One improvement we will make at launch is to add a video games upgrade option, similar to our upgrade option for Blu-ray, for those who want to rent Wii, PS3 and Xbox 360 games. Members have been asking for video games for many years, but now that DVD by mail has its own team, we are finally getting it done. Other improvements will follow. A negative of the renaming and separation is that the Qwikster.com and Netflix.com websites will not be integrated.

There are no pricing changes (we’re done with that!). If you subscribe to both services you will have two entries on your credit card statement, one for Qwikster and one for Netflix. The total will be the same as your current charges. We will let you know in a few weeks when the Qwikster.com website is up and ready.

For me the Netflix red envelope has always been a source of joy. The new envelope is still that lovely red, but now it will have a Qwikster logo. I know that logo will grow on me over time, but still, it is hard. I imagine it will be similar for many of you.

I want to acknowledge and thank you for sticking with us, and to apologize again to those members, both current and former, who felt we treated them thoughtlessly.

Both the Qwikster and Netflix teams will work hard to regain your trust. We know it will not be overnight. Actions speak louder than words. But words help people to understand actions.

Respectfully yours,

-Reed Hastings, Co-Founder and CEO, Netflix

p.s. I have a slightly longer explanation along with a video posted on our blog, where you can also post comments.
 

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http://beta.finance.yahoo.com/news/netflix-shares-crater-37-forecast-135322743.html


10/25/2011:

Netflix shares crater 37% on forecast

By David B. Wilkerson,MarketWatch | MarketWatch – 2 hours 57 minutes ago
CHICAGO (MarketWatch) — Netflix Inc. shares plunged more than 37% in morning trading Tuesday, amid an avalanche of negative analyst comments following the video rental provider’s disappointing fourth-quarter outlook and its disclosure that international expansion would prevent profitability in the first half of 2012.

Netflix’s stock (XNAS:NFLX - News), trading near the $300 mark as recently as July, was down $44.09 at $74.74.

Analyst Tony Wible of Janney Capital Markets downgraded the stock to sell from neutral, offering a blistering indictment of the formerly high-flying company.

“We believe the [Netflix business] model is unsustainable, as the company faces rising costs that it hoped it could pass on to its [subscribers],” who appear unwilling to accept them, Wible wrote to clients. “The company has paid exorbitant prices for content while painting itself as a cheap rental service. Simply put, the company’s brand does not fit with its large/growing content obligations.”

Wible added that, at this point, following a disastrous third quarter in which Netflix made a number of uncharacteristic blunders, “investors would likely be reluctant to believe any good news (if any were out there), as management has lost the benefit of the doubt.”

Needham & Co.’s Charlie Wolf reiterated his underperform rating on the shares. “Netflix’s installed base of subscribers does not appear to be growing fast enough to cover the growth in streaming content costs [yet] the company plans to forge ahead with even larger streaming deals in 2012.”
Promotion for Netflix’s ill-fated plan to spin off its DVDs-by-mail service under the Qwikster brand name.
Arvind Bhatia of Sterne, Agee & Co. reaffirmed his neutral rating on the stock, saying the news that Netflix could lose as much as $500 million internationally next year was “by far the biggest negative surprise of the quarter,” given Netflix’s ability to turn a profit in just a year in the Canadian market.

Bhatia found slight cause for optimism: that 2012 “should be the trough year and earnings and earnings growth should resume in 2013 and beyond.”

“What we have here is one major reset,” wrote Mark Mahaney, an analyst at Citigroup, in a note to clients late Monday.

Mahaney said the outlook was “particularly disturbing” in its revelation of a decline in domestic streaming subscribers compared with the third quarter, which he said seems to indicate “both major misexecution and likely competitive pressures.”

Netflix said that earnings in the fourth quarter would be in the range of 36 cents to 70 cents a share, on revenue of $816 million to $845 million. Analysts polled by FactSet Research were expecting a profit of $1.05 a share on revenue of $923.7 million.

The disappointing forecast reflects greater-than-expected subscriber cancellations, for its DVD-and-streaming plans, DVD-only and streaming-only subscriptions, Netflix said.

“What we are seeing is a second wave of cancellations from the pricing increase,” said Chief Executive Reed Hastings, during a conference call with analysts.

“The first wave was in July, when we had the announcement. The second wave has been in September and October, as people become more aware of the price increase, and they change their plan or cancel. That wave has been declining very steadily over the past couple of weeks. So we have substantially less weekly cancels now than we did just three or four weeks ago.”

In streaming, net additions are looking to be down in October, about flat next month, and “strongly positive in December,” with the result that streaming additions will be slightly down for the quarter, Netflix said.

Hastings said the prediction for an uptick in December is based on what Netflix saw last year.
Reuters Netflix CEO Reed Hastings speaking during a session at the All Things Digital conference in Palos Verdes, Calif., in June.
At the end of the December period, Netflix expects to have about 20.8 million streaming customers, down from 21.4 million in the third quarter.

The company also plans to double the amount spent on content in 2012, about on par with Time Warner Inc.’s (XNYS:TWX - News) HBO unit. Hastings said Netflix expects its rate of streaming subscriber growth to outpace those costs.

Netflix said its third-quarter profit rose 63% from the same period last year, on a 42% increase in subscribers to its video rental services, topping most analyst estimates.

Net income for the quarter was $62 million, or $1.16 cents a share, compared with a profit of $38 million, or 70 cents a share, in the year-ago period.

Revenue rose 49% to $822 million. Analysts polled by FactSet Research were expecting a profit of 96 cents a share on revenue of $812.5 million.

In July, Netflix announced that it would raise the price for a combination DVD-and-streaming video plan to $15.98 from $9.99 a month — a 60% hike.

Hastings said he expected some negative reaction, but believed the popularity of the company’s streaming-only option would allow it to increase the fee for the combo plan.

Consumers were angrier than Netflix anticipated. In mid-September, it warned that it would generate about 1 million fewer subscribers than it expected when it gave its initial forecast in July. The shares plunged 19% on Sept. 15, the day of that warning.

In September, Netflix said it would spin off its DVD unit into a separate entity called Qwikster while retaining the Netflix brand for the streaming product, a move many analysts found baffling enough to be compared with Coca-Cola’s New Coke debacle of the 1980s.

On Oct. 10, Netflix reconsidered the move and said the DVD and streaming business would remain together under the original brand.
 

bet365 player
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Oct 25, 2006
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NFLX book value is approx $10, Walls Street criminals inflated value of this company, it top out at $300 three months ago, super-overvalued.

It's still a very expensive stock at this level comparing its book value.
 

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