THB #397: Whose Strike Is It Anyway?
As the guy who has been writing for almost a decade about Netflix’s financial system for operating a streamer as one that none of the Legacy companies could ever replicate successfully, I am amused/please to hear it when others who think about the industry for a living agreeing passionately with my long-held position.
But almost all of them are a bit late.
I don’t want to get into detailed finger pointing, but for years, I was the idiot who didn’t think that killing theatrical as we have known it was a good fiscal idea, that Streaming could only be profitable as the dominant platform if you expanded your television business (streamed) to 100 million or 200 million or 300 million households outside of the US and Canada, and that there is a distinct fiscal difference between the theatrical and Legacy television businesses vs Streaming and that crossing streams (so to speak) would likely be disastrous.
I wrote about this to the point of boredom through much of the last 4 years, even as others applauded Kilar’s Folly (WB theatrical going day-n-date) and the massive increase in content spending for Streamers and the erosion of Cable (which was almost always exaggerated).
Netflix’s unique position with Wall Street as a faux tech company has allowed them to succeed and fail, rinse and repeat, for the last dozen years, always protected by the financial bubble of Wall Street’s blind belief in the fantasy of Netflix. I am not downplaying the success that Netflix has had. But it has never matched objective reality in the last 12 years of stock growth.
On September 5, 2011, Netflix’s stock was at $29.14 with a market cap of $11 billion. On September 5, 2017, it passed $175 a share with a market cap of $76 billion. Netflix has never been below that since. Six years of ups and one particularly severe down, but never valued at less than $80 billion. In the 16 months since that low point, the market cap more than doubled again, to the current $178 billion, based on no new revenue or unexpected profitability... only the promise of adding ads and charging password sharers, neither of which has yet moved the financials in a significant way.
This brings me to the podcast that inspired me to write this today.
I have listened to most of these podcasts hosted by Billy Ray. Strong guests, strong takes. I don’t always agree with everything. But it’s always interesting. I don’t know Peter Aronson, except by reputation. I have known Richard “The Ankler” Rushfield for a long time and spent a lot of hours in parking lots bitching about the industry and journalism together. I enjoy listening to the guy and wish there was more of him on his own to listen to. And I have chatted with Billy Ray a few times and am happy for him every time the crowd says the words along with Nicole Kidman at the AMC and applauds at the end.
Anyway…
Many smart things are said. Certainly worth the listen.
But all 3 of the speakers on this podcast engage in the kind of broad stroke assumptions that make me crazy as we continue to navigate The Strikes.
Tech is controlling negotiations and looking to eat the filmed entertainment business and once it does, it would be just as happy to vomit it back out into the garbage.
Legacy companies should not have moved into streaming and they would be better off financially now… cable would probably still be over 90 million domestic households.
AMPTP wants to break the WGA and never wants to deal with a talent union again.
There is also a lot of talk about the bad intentions of “studio people” and this absolutism about how they all hate writers, they could not care less about movies, and their intentions are always the worst.
Here are my problems with these issues.
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