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It’s not just the huge miss on subscriber growth that has sent shares of Netflix (NFLX) plunging in the two days since it reported second quarter earnings. The stock fell 10.27%, or $37.23 a share, on July 18 and it was down another 1.87% today as of 2 p.m. New York time.

It’s the reason for the miss.

Netflix reported earnings of 60 cents a share, beating Wall Street projections by five cents a share. Revenue climbed 26% year over year to $4.92 billion vs the $4.93 billion Wall Street projection. That kind of revenue growth isn’t bad unless you’re a stock trading at 124 times trailing 12-month earnings per share. Then investors are pricing in a lot more than 26% year over year revenue growth.

But the real problem is that Netflix reported that paid global subscribers grew by just 2.7 million. That was way less than the 5.5 million subscribers added in the second quarter of 2018. And way less than the 5 million subscribers forecast for the quarter.

That huge miss on paid subscribers has been enough to call Netflix’s basic growth strategy into question just at a time when the company is about to face significant new competition from Disney and AT&T in the streaming space.

Netflix’s current strategy is based on spending big on content in order to attract new subscribers (and in order to justify higher prices for its service.) In 2018 Netflix spent $13 billion on content. The company hasn’t released specific spending projections for 2019 but has said that it expects spending growth to continue along its recent trajectory. That would put 2019 spending somewhere around $17.5 billion.

The majority of that spending–about 85% of new spending in 2018–is targeted for original content. Makes sense: If you can’t get specific must-watch content anywhere else but Netflix, then you’ll rush to subscribe and you’ll pay up when the company raises subscription rates.

That’s a great strategy as long as the original content eating all those bucks draws lots and lots of eyeballs. “Stranger Things” is an example of original content that is drawing eyeballs.

But Hollywood history is full of original content that didn’t put the expected number of fannies in the seats at theaters. It’s hard to produce a steady stream of original content with predictable popularity. That’s why Hollywood studios produce so many sequels–and even then there’s no guarantee that the new “Star Wars” will sell as many tickets as the last one.

And it’s why in the streaming business, older content with established popularity is worth its weight in gold. Despite all that spending on original content, the real audience draws on Netflix are licensed older shows such as “Friends,” and the “The Office.” Nearly two-thirds of the hours that subscribers spend watching Netflix are spent watching licensed content like these shows (and “Grey’s Anatomy,” to add another example.)

So what happens if that popular licensed content goes away?

That’s the big question that investors and traders were left with after the second quarter earnings report. Disney is “retrieving” all its content–including all the Star Wars, Marvel, and Pixar franchises–for its own Disney+ streaming service set to launch in November. At&T’s HBO Max and Comcast are also set to resume popular older content that now runs on Netflix. “Friends” will stream exclusively on Warner Media (AT&T) after the launch of HBO Max. NBCUniversal (Comcast) has announced that it will not license “The Office” to Netflix after 2020. Disney, which owns ABC, will, I’d assume, end its license to Netflix for “Grey’s Anatomy sometime after the November launch of Disney+. These three shows are in the top four of all content streamed on Netflix.

Netflix can replace this content and draw in more subscribers by spending more money on original content (and on any content available for license. The price of any proven licensed content will climb, of course. Netflix paid $100 million to license “Friends” for 2019. That was roughly three times the price of the prior license.)

Maybe. But certainly not cheaply.

Licensed content accounts for 63% of viewing hours on Netflix. And as recently as 2017 more than 40% of Netflix subscribers in the United States almost exclusively watched licensed content rather than the 700 original shows Netflix produced.

All this, investors and traders fear after second quarter results, adds up to slower subscriber growth, slower revenue growth, and higher spending on content. If those projected trends are accurate actual tends, then Netflix with its 12-month trailing PE of 124 and its forward PE of 95 times projected earnings is seriously over-valued.

Despite the stock’s recent tumble I wouldn’t buy these shares until, at the earliest, after the November launch of Disney+ and after Netflix’s next earnings report scheduled now for October 15.