Netflix 4Q15 Earnings Call Notes

Reed Hastings

In App payment is a nice addition

“customers have always been able to sign up on IOS but they had to do it in the mobile web Safari Browser and now they can do it in app. And it’s a positive, it’s not transformational but it’s really nice positive and a particular in new markets as we expand around the world where we’re less note and less trusted, the comfort for customers in terms of using the Apple payment mechanism versus entering their international credit card information is helpful.”

Content is the key to get the incremental people to join in the US

“I’ve been hearing a lot about it but nothing yet has compelled me to join. And so the big driver is getting people excited about whatever title we have and then making it easy for them to join. So whether it’s integrating on the Smart TV or integrated into the MVPD set-top or the Apple TV those are the things that make it easy to fulfill that desire.”

Local content helpful for building momentum in foreign countries

“the first year in the UK was a really tough market, so it’s usually successful for us now but it’s not true that it always well. We saw the same thing in Brazil for different reasons. So being light in the beginning doesn’t worry as a bit. And what we’ve seen in market after market like Spain, Italy, France, Germany, is this building momentum as we do more and more local content.”

Global piracy is a big problem

“Overall global piracy is a big problem and we’re working with all the content owners partially to be a great carats and also to have the other services like HBO and Amazon be great carats. And so we can work together on this antipiracy agenda.”

Ted Sarandos

Original programming growing as a percent of total spend

“We’ve been on the trajectory accelerate original programming. I mentioned a couple weeks ago, we’re going to launch 600 hours of new original programming this year alone. So it is a function of as our budget continues to grow, as our subscriber base grows, we are licensing programming and we are creating programming. As a percentage of our spent, original spending is growing, but as an absolute there are licensing dollar are continuing to grow as well.”

A lot of kids programming coming out too

“there is a large volume of specifically if kids programming coming out when normally people think if Netflix’s original programming, they were thinking about our sophisticated dramas and adult comedies more so than our kids programming, but quietly but I am asking a very big selection of original kids programming at Netflix.”

David Wells

Invested in a pretty robust payments team to understand payments around the world

“I’ll take that one. So I think we – you know we’ve got pretty robust payments teams that we’ve invested internally in building that out, getting smart in terms of the payment systems across the world, we’re pressing on gift cards and prepaid cards that might open up you know to the market to those people that don’t have access to a credit, debit card. But in rest of world, again it’s pretty early days and I think we’ll take the approach that we took in Latin America which is just to look at our next best opportunities to open up additional pockets of the market.”

Our international pricing is for the elite. Think of them as the iPhone owner

“Well we’re starting off definitely appealing to elite. I mean I mentioned that in Russia and Eastern Europe you know we’re still in English. In Vietnam and Cambodia, we’re in English. So we’re serving elites. You can think of them as a shorthand as iPhone owner, so that they pay $800 for an iPhone, they are comfortable with entertainment in English, and so for them you know $8-$10 is a sweet spot price. Certainly in future years you know as we do more and more and trying to expand it to the mass market, you know we can look at additional pricing option, but we feel good about our pricing and the value for these global originals right now.”

Increasingly spending licensing dollars on content that’s successful in other ways

“Increasingly we are spending most of our licensing dollars on content that’s successful in that way from small things to other way to big things like Oscar nominated movie “The Big Short” we’ll have the Pay TV window around the world, so people will be able to watch that movie on Netflix wherever they are.”