Have been watching NFLX, curious why it's been beaten up the past few days, then came across the article below.
Any thoughts/opinions on NFLX going forward?
fool.com
2.9 Million Reasons for Netflix to Worry
By Rick Aristotle Munarriz
November 16, 2011
You rarely find breaking news at the bottom of a press release, but there's something peculiar about Netflix's (Nasdaq: NFLX ) press release this morning detailing a new overseas content licensing deal.
See, Netflix press releases now refer to the company as serving "more than 20 million streaming members in the United States, Canada, and Latin America." Less than a month ago, it was still referring to itself as serving "more than 25 million members" in those regions.
Netflix hasn't shed 5 million subscribers since the end of its third quarter. Well, at least we can hope that's the case. The key difference between the two corporate descriptions issued just three weeks apart is that Netflix is only referring to "streaming" customers now.
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Netflix still had 22.93 million streaming subscribers at the end of the third quarter. Why is it simply drawing the line at "more than 20 million" on that front? Where have the 2.9 million extra subscribers gone?
Even Netflix doesn't know when the migration madness will end
It's easy to see why Netflix is playing it safe. The last thing it wants to do is brag about, say, "more than 22 million streaming members" in today's press release, only to whittle it down to 21.5 million when it inks another content deal next week.
The rub here is that Netflix did issue pretty specific guidance for how this quarter will play itself out on the streaming front.
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Netflix's guidance last month calls for streaming subscribers to clock in between 21.6 million and 23.5 million by the end of this quarter.
The obvious answer is that it's simply leaning on a round "more than 20 million" sum to cover everything up to the 25 million milestone, but it's not as if the company has shied away from more specific descriptions before.
"More than 23 million members," reads a few of its springtime press releases.
I may be making mountains out of molehills, but remember this if Netflix somehow falls short of its late October guidance. Even Netflix tried to warn you. |
