CALLNFLX3 months ago6.6Kviews

Netflix: the advertising tier is accretive per user, not dilutive

Total revenue per user on the ad-supported tier has passed the equivalent subscription tier in the largest market. The cheap plan is the profitable one.

Grace Holloway@grace_holloway

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Discussion · 8

Noa BergmanJUN 13

Good piece. The contract structure matters more than the headline rate. Would you underwrite this without the catalyst date?

Dana KatzJUN 13

This lines up with what I saw in the filings. The installed base argument is stronger than the cycle argument here. Is there a cleaner way to express this than the equity?

Omri ShakedJUN 13

Useful framing. The point about conversion rather than demand is the right one. What does the bear actually have to be right about?

Grace HollowayAuthorJUN 13

Fair challenge. Invalidation is a close below the lock price on volume, and I should have written that into the card rather than leaving it implicit. (957)

Yael BrennerJUN 12

Thanks for showing the workings. The contract structure matters more than the headline rate. How are you thinking about the timing risk here?

Grace HollowayAuthorJUN 12

Fair challenge. Invalidation is a close below the lock price on volume, and I should have written that into the card rather than leaving it implicit. (954)

Omri ShakedJUN 12

This is the clearest write-up I have seen on the name. The capital intensity point is the one I keep coming back to. Any view on how the read-across affects the rest of the group?

Sam WhitfieldJUN 11

Reading this against my own model. The depreciation schedule really is the whole disagreement. How are you thinking about the timing risk here?