THB #479: Netflix Q4 2023 - Forever Blowing Bubbles

taa-smart!

These used to be interesting.

Less so, now.

Netflix had a good quarter. Nothing terribly significant. But good.

Netflix overdelivered again on subscriber additions, which of course, they told us were no longer an important metric. But it really is The metric that has pumped up Netflix’s stock price in the last couple quarters, bumping up 5.89 million announced in July, 8.76 million in October and now, 13.12 million today. The stock price from just before the announcement in October was $346. Right now, it’s $535. That’s around 40%, a $80 billion difference in market cap, for adding 22 million subs, which is less than a 10% increase in subscribers. Makes no sense, really. But... Wall Street…

The company is doing fine. They are a mature business - unlike any of the other major streamers - and they are making adjustments, the biggest one to advertising. The theory of Ad-based VOD for Netflix and others is that there is more money in ads than in Subscription-based VOD (fully paid) and the ARPU will grow, even as subscription revenue drops.

Not quite yet.