Thread by @IntrinsicInv

This morning, we published an in-depth report by Arif Karim on $NFLX and how it built an emerging moat. 1/10

intrinsicinvesting.com/2018/07/12/net…

Netflix used Internet distribution to build a moat, becoming the first #GlobalScaleMedia media company in the world, disrupting the business models of traditional media incumbents. NFLX 3700% return v 200% for top media co's result of this. 2/10

It’s done this by restructuring media value chain (H/T @benthompson bit.ly/1OMVVax ), creating direct relationship w consumers using classic @claychristensen disruption strategy in overserved Pay-TV mkt but w "delightful" user experience, convenience, & low friction 3/10

US Pay-TV literally dying while internet access allowed content distribution to explode w/ global smartphone ubiquity; media scale now capable of going global & NFLX developed collection of capabilities to create flywheel underpinning success for new global scale model 4/10

Culture allowed NFLX to take ST pain of biz model change to global streaming service opportunity & make the content/tech investments necessary to build moat & scale despite 75% hit to stock & barrage of doubters since, but “market” sussed what the jig was... most of the time 5/10

Many investors have been skeptical (including us) but consumers have loved service (H/T @ballmatthew), despite 3 price increases (pricing power?), across US and international markets. Godfather of cable, John Malone knows what’s up too… cnb.cx/2L3qYqe 6/10

NFLX reached tipping point in content scale, will be one of handful of #globalscalemedia co’s, with greater buying power, lower per unit cost, better svc, & broader content catalog for more subs globally than incumbents. Now 2nd largest Pay-TV svc in world w 2-3B user TAM! 7/10

Innovations/scale in tech, marketing, & content favor NFLX being leader w wider gap every yr – e.g. #passwordsharing isn’t “revenue leakage” as most analyst still fail to grasp, but habitualizing viral marketing strategy – so go ahead, share with friends, family, whoever! 8/10

There is old media tech, bit.ly/2ucLjPU

Then there’s NFLX tech, bit.ly/2f6E7gk

9/10

It’s the final countdown for traditional Pay-TV… bit.ly/1b73uns

Additional thoughts found in the full report, which can be found here:

intrinsicinvesting.com/2018/07/12/net…

Pls see also our previous post discussing media disruption here:

intrinsicinvesting.com/2016/08/16/of-…

10/10