Unfortunately the first article you linked ignores several key points.
It makes no mention of the revenue Netflix will gain by owning much of the content it's paying to produce, meaning possible licensing and syndication deals plus some DVD sales down the road. People still buy DVDs these days, especially of complete series. Netflix is making a lot of those.
It also doesn't address the possibility of Netflix using advertising within shows to provide the service for free or at a lower cost, like Hulu, Roku, and iQIYI do. The revenue it would bring in would be tremendous, it would add substantially to the subscriber base in poor countries, and advertisers would be lining up to get on the platform. I bet they've already tested it and could start it relatively easily, as I've mentioned previously on this forum.
I found this comment in that article curious:
Netflix has proven it can make good content for a US audience. But to achieve international success, it needs to do so in countries as diverse as France, India, Mexico, and Brazil.
For the most part, TV is a “local” thing. Americans like to watch American shows. Brazilians like to watch Brazilian shows. That means Netflix must make “local hits” to attract the masses in these countries.
So far, it has failed at this. Yet, in the very next section he writes about the huge cost of new content, but says:
This new content has helped bring in 20 million international subscribers in the past year. But it has come at a massive cost. Wait, what? He just contradicted himself. Either they have to have local hits to attract new customers or they don't. Both can't be true.
Literally every new Netflix show I watch has voice credits for at least 5-10 other countries at the end. Are they dubbing these shows just for the grins, or is it because it works when attracting new subscribers in foreign lands where the primary language isn't English? Obviously the latter, and it's working.
It's funny that you compare Amazon's success in upending Flipkart in India, since the only comparison I was making was for streaming services. Netflix doesn't sell physical goods. Amazon only charges Rs. 999/year for Prime in India. That's the equivalent of $13.60/year in the U.S. Amazon must be hemorrhaging cash there.
Funny also that you mention Netflix's P/E, since Amazon's is also 160. I used to make fun of Amazon back in the dotcom days and wondered how long they could keep burning through cash and getting investors to buy their story. Look where they are now. |
