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Quick $NFLX Q2 thoughts (not ordered)

#1: Biggest show, #StrangerThings, launched to biggest-ever viewership (40 of 155MM accounts) 4 days after Q2 ended

If released week earlier, odds are US would have been flat. Still bad, but July 17 would look same and narrative VERY diff
#2: What happened in Q2 in the US? Nothing. Netflix lost 100k of 61,000k subscribers. There was no change. That's the issue.

Actually not true, they hiked most prices 20%. So actually Netflix got worse, but barely changed. Issue is it didn't get better enough to get new subs
#3: Story is that Netflix's inertia seems to be almost over. Just doing the old thing, but more, and riding the decline of pay-TV (i.e. shift of video viewing) is over

#4: Bad for two reasons, 1, we only just hit Netflix's lower goal (60-90), 2, inertia ended before competition
#5: International bad too, but Netflix will still grow 80% of HBO in 2019 in rev, add more subscribers than ever (widening lead) and likely more in 2020 than any competitor, even those starting from 0
(More to come, boarding flight)
#6: The implied inelasticity of demand shown by hiking prices 20% and losing <0.5% of subscribers (net was 0.15%) is incredibly enviable. That's actually a positive story

#7: Q was definitely very light. OITNB (signature show) slipped to Q3, no new hits or even triples
#8: Failure to launch new hits is real prob once you start to lose top licenses + approach saturation. But remember Shonda Rhimes (had 3/15 biggest shows on TV for 3 years) and Ryan Murphy (more diffuse but even more impressive) have numerous series in development, hit next year
Netflix is also taking more "at bat's" than ever now, as overall spend keeps growing and share of that spend on new originals grows too.

If hits was the core issue, we should see relief
#9: This is probably the best churn in subscription video (traditional HBO, Showtime distribution included), despite price hike and larger sub base.

Most see multiples of this per month, let alone after key show ends a season.

Hence issue is subscriber TAM and tineline
#10: Netflix's LT growth potential is far more about int'l headroom now than US. It's the real concern in Q2.

But it's only one Q miss and it's v unclear how big the opportunity is or isn't, too (Reed IDs 700mm Pay-TV homes outside China, with Netflix leading TAM growth daily)
#11: Think on what this tells you about "Quality" and "Hits" as a driver in competition.

Netflix had a Q with no hits or popular returning series. Avg quality seen as dropping overall, but especially in Q due to license losses and no good replacements.

But subs were flat.
You have a few plausible scenarios.

A: New/more hits and lose subs (terrifying); new/more hits and subs flat (bad; you're on an accelerating treadmill); new/more hits and subs grow (good, you have execution headroom).
B: No new hits and lose subs (bad, you've small moats and/or strong competitors); no new hits and stable (good, you have moats and core value); no new hits and grow (good, tailwinds beating execution - though may mean lower moats and competitors can more quickly catch up)
We don't have quite enough to know the answer. But the fact everyone says Netflix's content is bad/getting worse (wrong, but) and has grown or been flat... Is reassuring. Also good to know that hits will drive growth - as that's partly about "at bat's" and pipeline
#12: What the quarter looks like
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