I think people still view Netflix as a luxury ... Akin to something like a premium package with their current cable offering and like HBO or Starz, etc. They would be willing to trim that rather than lose access to a much broader range of channels despite it being the economically quickest way to shed costs. I also think that the perspective in this thread is of young people who view Netflix as a true substitute for cable, rather than as a "premium channel", which the older crowd does.
Netflix obviously benefits from the Cable Cutters and more so when discretionary spending was shrinking after the Housing bubble burst in 2007. Netflix is still riding high from the demise of cable companies essentially. There is an established trend of increased Internet based TV programming. Anyone with a Roku, Fire Stick or Chromecast or Apple TV will tell you that. People do not stop watching TV, they find cheaper more robust alternatives, which is why I initially bought NETFLIX instead of opting for premium cable movies channels. HBO and Show Time were ridiculous in price compared to instant NETFLIX streaming of any movie, anytime and commercial free. Now I do know a lot about practical investing. Being in the computer industry, I used to joke about the DOT.COM bubble companies being worthless. They usually had a few floors rented in a high rise somewhere, filled them with a network of computers, a website, and produced no income. Some things never stop repeating themselves. Investors are one of those things. In other words, Investors are predictable. Essentially, all humans are similarly wired and therefore investors, in the aggregate, respond predictably to greed and fear. You can chart their price discovery behavior, first the greed to make money, then the fear of losing it. |
