Netflix 3Q14 Earnings Call Notes

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This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

The whole society is moving to internet video

“everything that we’re seeing is completely consistent with the whole society, not only the U.S., but around the world is moving to Internet video and Internet television. And so, I think, it’s completely consistent with what we’re seeing. And we’re seeing – we saw Stars a week ago announced that they’re doing an Internet video services is HBO. Perhaps, there’ll be other providers over the coming weeks. And so, think of all the big networks are moving to Internet video, and it’s just becoming a very large opportunity.”

Don’t think that HBO’s over the top offering is a big change in the competitive landscape

” On the consumer side it’s one more channel, so already consumers subscribed to us and Hulu, and Amazon and they do pay-per-view and they do DVD and they do cable. So, there is so many great sources of entertainment and consumers subscribe to many of these.

So, there is not much of a change in the direct competitive landscape. We and HBO have completely different content. So, I don’t think it’ll be a significant impact at the consumer level. As we bid for content, that’s more significant”

We just didn’t grow as much as we thought

” we just didn’t grow as much as we thought, we were going to in terms of bringing folks in. So across a number of markets, we were lighter versus our forecast than we expected”

Binge watching is universal

” think of basic consumer behavior as they want control, they want internet video, because they get to watch under the screen. They get to watch anytime they want. They get to binge watch. Those are very universal value. And so, we’re gaining increasing confidence that Netflix is highly relevant around the world, and that’s why we’re just, looking forward to continue to expand next year.”

We have enough cash for the next few quarters

” I think that we have $1.7 billion in cash. I think we’re okay for the next few quarters. But we continually look at this. And if we continue to do expand both content and international as we expect to do, then you should continue to see some pressure on the cash on the free cash flow.”

On net neutrality: We don’t ask them to pay for content, they shouldn’t ask for us to pay for their network

“Well, the simple version is they collect revenue on the Internet from their customers and that pays for the network, and we don’t ask them to pay for our content. And we don’t think they should ask us to pay for their network. So, that’s the basis of the no-fee interconnect.”