Thread: NFLX

Originally Posted by Youngbp04

Also found out today that a bunch of insiders have been dumping shares left and right... Never a good sign. But I do still believe in the business model they just need to re-align their focus with the consumer and place emphasis on international growth

Care to elaborate?

Here is a brief write up on it.

NFLX International Growth Prospects

I am hoping to gain more clarity on their pricing for the new countries they are entering and see what the strategy is for physical dvds. As the article mentions there are many countries and regions that I believe would be a great customer base, but their internet connection speed would be a limiting factor.

But again, I want to clarify that I am unsure of my next move...It is for sure that this investment has turned against me in the short term (luckily it was only a small investment) but I am not sure whether it has turned for good or if this is a short term buying opportunity. Before I make that bet I am going to be digging a lot more and need to be 100% confident I believe in their growth, international and domestic.

This wasn't a technical trade, it was a fundamental based trade. But the fundamentals also might be breaking down. I am not making any rash decisions so I am taking my time to see if it is wise to cut losses or if this is an entry.

I think you should respond to the other thread you created...A lot of questions are there.

Originally Posted by Youngbp04

Also found out today that a bunch of insiders have been dumping shares left and right... Never a good sign. But I do still believe in the business model they just need to re-align their focus with the consumer and place emphasis on international growth

Is is their regular schedule for selling like exec's have in place or its it an increase?

Originally Posted by rossii

Is is their regular schedule for selling like exec's have in place or its it an increase?

I am not sure what you mean?

Executives set up pre determined trading plans for buying and selling stock. This can be based on price, time etc. So is this selling based on this or are they selling besides the schedule?

I am not 100% sure but it seems like an awful lot to be scheduled selling, there has also been a lot of options exercised recently...See the SEC filings: NFLX Insider Trading

I mean you can't really blame them for taking money off the table it has had a large run up recently, but it is still alarming

This is an email I just received from Netflix... I want to get it out there that off the bat and on the surface I think this is a bad idea...

Dear xxxx,

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.