nScreenMedia OTT multiscreen media analysis

CandW discuss why 2020 will be a rough year for Netflix

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This week we discuss Netflix Q4 2019 performance and wonder why Jim Cramer is so bullish on the company. Looking at the results, they suggest Netflix 2020 outlook is for curtailed growth in its two most significant regions.

Chapter 1: Netflix Q4 2019 U.S. performance (1:30)

Substantial subscriber gains outside of the U.S. masked how poorly the company did in the U.S. Will runs down the U.S. results and discusses why they were so weak.

Chapter 2: Regional results and outlook (8:20)

Netflix has begun to break out regional data for the U.S. and Canada (UCAN); Europe, Middle East, and Africa (EMEA), Latin America (LATAM), and Asia-Pacific (APAC.) I run down the results and explain how important each region is to Netflix’s business.

UCAN (8:50)

The most significant region for Netflix with the highest average revenue per unit (ARPU), but for how long?

EMEA (9:50)

EMEA is growing fast though ARPU trails the U.S. Can it catch up to UCAN?

LATAM (10:40)

Nine years after launching in LATAM, Netflix still sees solid growth. ARPU trails EMEA and UCAN.

APAC (11:30)

The smallest of the four regions Netflix serves, but it is growing the fastest. ARPU declined in the fourth quarter.

Chapter 3: Revenue impact in 2020 (14:10)

Netflix 2020 outlook for revenue growth seems set for a steep decline in 2020 as subscriber growth slows, and price pressure from Disney+ restrains price rises.

Chapter 4: Subscriber impact in 2020 (16:00)

Netflix’s forecast for Q1 2020 suggests that the number of UCAN subscribers could decline in the first quarter of 2020.

Chapter 5: Outlook beyond 2020 (20:20)

Can Netflix weather the 2020 storm and emerge strong in 2021 and beyond?

Chapter 6: Justification for a lower-priced ad tier (23:00)

Will thinks it is time for Netflix to introduce an ad-supported tier. He gives his justifications for why now the time is right.


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