here to discuss is Michael Robinson, chief technology strategist
at money map press. Michael, what were some
of your biggest takeaways from this report? Well,
as you said, you know, the competition is
really growing and I think, you know, I'm
looking at an article written by john Steinberg that appeared
on the cheddar website uh what 1920 19. And
I'm looking at all of the channels that you guys
are on. But I don't see netflix now if
you've added netflix because again, this was an older
article that tells you a lot, you've got sling
hulu, my wife and I are watching a lot
more hulu Youtube is going crazy. It's just so
much, there's just so much content. And the
problem we have is that netflix has become sort of
like in the early eighties, every car company,
they want to come to the United States targeted mostly
general motors. Right? So they're like the general
Motors of their era in terms of the online streaming
, you know, once autos and ones ones,
you know, over the web, but barriers to
entry are a lot lower than they used to be
. So, every time you turn around, there's
some new competition coming along and apple tv has really
come on strong and it's a formidable force in there
as well. So you just got so much streaming
content, you can't watch everything on netflix and,
and then they just can't be all things to all
people and that's what they've got in the last time
I was on chatter, I talked about how you
want to avoid the Covid darlings and this is this
is definitely proof mhm Let's definitely stay on that competition
line. So they said that it's affecting their ability
to attract new users to the platform. I think
the exact quote for them is this added competition may
be affecting our marginal growth. Some what does this
say about the overall streaming landscape? Well, margins
are getting harder to come by because there's so much
competition and so it's kind of strange. You know
, you see that netflix is trying to raise its
prices at a time when growth is slowing. It's
kind of an odd thing to do. You would
think that. And so I think part of the
reason why they're stock, as you mentioned the open
, you know, overall the report wasn't that bad
. I mean they either met or beat forecasts and
some and some key categories but it's the slowing growth
that has people worried and this is coming at a
time when there's brutal competition in the online world.
But also, you know, this is a stock
market looking for direction. There's a lot of concerns
about growth. We're in technically we're in a technical
correction right now. I think we're still there today
on on tech small caps also have entered into a
correction or off about 10.5 to 11% of the session
ends today from their recent high so it's the growth
is really what's worrying people A we've got slowing economic
growth and B we've got slowing growth for this company
as see we have an increase in competition. As
I said, there's just so much content out there
now let's keep on that report front. You know
, a lot of netflix content that they warned that
it was going to come in the second half of
the first quarter. Bridget in season two, the
adam project that's only debuting in March. The Crown
is debuting later this year. Could netflix see revenue
and subscriptions rise as the year progresses. Absolutely.
I think by the third or fourth quarter of 2022
they're going to be in much better shape. But
we see this all the time like self like shoot
first and ask questions later. We just, we
get in a market like this, it's already choppy
, You get these gross Overreactions. I do think
this is way too big of a haircut and I
do think that some people are probably uh I'm gonna
look to see when they can step in and get
bargains. Yes, I do believe that they have
a good shot at turning things around. These are
sharp cookies. I mean, these are, these
are not stupid people, they didn't become, you
know, so big by being by making a series
of bad decisions. I think they'll get this all
worked out. I think it's going to be a
couple of tough quarters, but I would keep an
open mind on netflix later on in the year.
But if I could find a really good entry point
. Now here's something that I'm very passionate about when
it comes to Netflix, definitely that overseas expansion.
So now we found out that 80% of new netflix
subscribers come from the Asia Pacific region. We know
that they've slashed their prices in India and they invested
over$500 million South Korea, probably following that squid
game success. What do you think? What do
you make of netflix International growth story And what do
you think this means for the streaming competition in the
US? Well I think they're very make an excellent
point. I think they're very savvy to focus on
international growth. I mean you've got population growth in
china, it's slow there but I mean you've got
massive populations in south south Asia, massive populations there
. Uh and you've got the rise of the middle
class, still going crazy in china. Again,
they've got some short term problems, but it's unstoppable
. The rise of the middle class also the rise
of the middle class of new wealth in markets like
like India and and uh you know, other other
asian markets, so I think they're very savvy to
be there and that means they have obviously they've got
a, you know uh cater to those audiences with
their content and as you mentioned squid squid game was
was a massive blockbuster. But um I think it's
a really smart thing to do to be focusing on
international growth because so many of their their competitors are
really focused on the domestic market, that's the easiest
place for you to enter and maintain. Let's move
on to one of Netflix's recent acquisitions. They acquired
game developer Night School Studio's last year and now it
offers 12 games on its platform. What do you
make of Netflix's game division? And where does it
stack up now that you see that Microsoft is definitely
getting into that game a little deeper when they bought
aqua vision. Well, I actually think that being
involved in being involved in gaming is really smart.
You've got a good installed customer base, you still
got a massive number of people out there who are
online and games have shifted to online um Where Microsoft
might have. The advantage of course, is that
by picking up Activision they've got you know, a
lot of new hit titles. I would I would
I would not discount Netflix's ability to gain market share
based on gaming and gaming is where you want to
be. It's an unstoppable trend right now as we
enter the metaverse. Right, so Microsoft and netflix
are both going to be metaverse players and Microsoft has
the advantage because they're an enterprise, they have the
enterprise business model that netflix doesn't have. But in
terms of just sure gaming, those things are addictive
. I mean you've got the rise of, you
know, the internet gaming where people are just playing
each other, massive parallel gaming systems are going on
over the Internet. So I think it's really smart
for them to add these titles. Of course it's
expensive in the, in the beginning too. To
launch titles yourself to make that acquisition have to spend
money and that's part of what's going on right now
is they're spending money today to film in the franchise
23456 quarters from now. Where do you think netflix
needs to focus in order to be favorable to investors
at this point? Execution? It's just execution,
execution, execution. I mean, it's just that
simple. I think they've got to be able to
tell Wall street, I think a little better than
what came out yesterday and they will, they will
, they're, they're sharp people, uh, what
the growth story is from going forward, not just
this next quarter, but what's the three year plan
? What's the five year plan? I think that
they can restore a lot of confidence if they could
just address, Okay, where you know, in
the investor presentation on the update that I would want
to see, What kind of growth are we seeing
internationally and domestically? Where are you two quarters?
But more importantly for me, I want to know
where they're going to be in three or four years
if I'm gonna be in it for the long haul
. And I'm not just gonna be a momentum trader
, I want to be a long term investor.
If I'm an institutional investor, I want to hold
this. I want some compelling reasons to hold this
through thick and through thin. I think they just
have to do a better job of communicating that.
But mostly they've really got to execute. They can't
just be, oh, well, you know,
global events are out of our control. It's all
about execution at this point for netflix. Well,
thanks to Michael Robinson, chief technology strategist at Money
Map Press.