CAPITAL MANAGING PARTNER PORTER
BIBB TO TALK ABOUT THIS.
THEY DON'T RELEASE STREAMING
NUMBERS.
WE KIND OF HAVE TO GUESS.
>> THEY TOLD US CHRISTMAS
CHRONICLES, THE KURT RUSSELL
MOVIE THAT OPENED FOUR WEEKS
AGO, DID 20 MILLION BUT THEY
DIDN'T BACK IT UP WITH ANY
SUBSTANCE OR BREAKDOWN OR
DEMOGRAPHICS.
SAME THING WITH "BIRD BOX."
WE ARE GUESSING THAT IT'S 45
MILLION.
IF THOSE NUMBERS ARE REAL, IT
WOULD BE -- AND IT OPENED IN
MOVIE THEATERS, IT WOULD BE THE
BIGGEST BOX OFFICE SUCCESS IN
HISTORY.
CHERYL: WHAT DOES THAT SAY TO
YOU IF YOU'RE DISNEY OR AT & T
WITH TIME WARNER CONTENT, OR FOX
OR COMCAST, YOU'RE TRYING TO
CATCH UP TO NETFLIX?
>> FIRST THING YOU SAY IS I'M
NOT GIVING YOU ANY OF MY DISNEY
OR FOX CONTENT, AND THEY ARE
PULLING IT ALL BACK.
NETFLIX IS GOING TO BE ON ITS
OWN.
THEY HAVE BEEN PAYING PHENOMENAL
FEES TO THE TOP TALENT, BUT FOR
100 YEARS, THE MOVIE INDUSTRY,
FOR EVERY TEN MOVIES THAT ARE
MADE, TWO BREAK EVEN AND ONE
MAKES A PROFIT.
THE REST OF THEM LOSE MONEY.
SO WHO THINKS THAT NETFLIX IS
GOING TO BREAK THOSE ODDS?
THEY SAY IT'S ALL IN THE DATA,
BUT THE DATA, I THINK THE SECRET
OF NETFLIX IS IT COSTS SO LITTLE
TO SUBSCRIBE, $7.99 A MONTH.
MOST PEOPLE MAYBE WATCH ONE OR
TWO OR THREE MOVIES, IF THAT, A
MONTH, BUT $7.99 DOESN'T BOTHER
ANYBODY.
WHAT'S GOING TO HAPPEN, THOUGH,
IS FOR THE LAST QUARTER, THEY
LOST $3 BILLION NEGATIVE CASH
FLOW.
THEY HAVE $14 BILLION OF OFF
BALANCE SHEET DEBT AND THEY
CAN'T KEEP PUTTING THE $8, $10,
$12 BILLION INTO NEW PRODUCTIONS
THEY HAVE BEEN AND STAY
COMPETITIVE.
CHERYL: IT SOUNDS LIKE A HOUSE
OF CARDS.
PUN INTENDED.
IT DOES.
YOU MENTIONED WHAT THEY HAVE
BEEN SPENDING ON CONTENT.
$12 BILLION JUST ON THE CROWN
WHICH I LOVE THAT SHOW.
BLACK MIRROR, MARCO POLO, THEY
HAVE HAD DISAPPOINTMENTS.
>> THEY ARE HANGING FIRE WITH
"ROMA" WHICH WAS NOT A MULTI
BILLION DOLLAR MOVIE, ONE OF THE
MAJOR CONTENDERS FOR BEST
PICTURE OSCAR.
CHERYL: WHAT ABOUT FACEBOOK?
I HAVE SEEN ADS NOW FOR A NEW
FACEBOOK MOVIE WITH CATHERINE
ZETA-JONES.
APPLE, AMAZON.
ALL OF THESE OTHER PLAYERS AND
REALLY, APPLE IS THE BIG ONE.
THEY HAVE ALL KINDS OF -- THEY
REALLY LOOK LIKE THEY WANT TO --
I MEAN, THEY HAVE ALREADY GOT
THE iPHONE --
>> I HATE TO GO AGAINST SOME OF
YOUR GUESTS, BUT DAN IVES WAS
TALKING ABOUT TESLA AND APPLE.
THEY WILL COME TOGETHER FOR A
PARTNERSHIP, BUT APPLE IS THE
MOST LODG
MOST LOGICAL BUYER OF NETFLIX.
BECAUSE THEY HAVE GOT THE iPHONE
AND ALL OF THE MOBILE DEVICES
AND THEY DON'T HAVE ANY CONTENT.
CONTENT CREATES MULTIPLE REVENUE
STREAMS, NOT JUST SELLING THE
HARDWARE, BUT YOU GET
ADVERTISING, YOU CAN REPACKAGE
AND RESELL THE CONTENT TO OTHER
DISTRIBUTORS ONCE YOU HAVE USED
IT.
THE WAY DISNEY AND FOX AND
EVERYBODY ELSE IS DOING RIGHT
NOW.
IT MAKES -- AND WITH THE DECLINE
IN NETFLIX'S SHARE PRICE, NOW
IT'S DOWN 40% FROM A YEAR AGO,
IF IT CONTINUES TO FALL, LOOK
OUT.
I THINK IF APPLE DOESN'T BUY
THEM, GOOGLE WILL.
CHERYL: NETFLIX, I THOUGHT YEAR
TO DATE, NETFLIX HAS DONE OKAY.
>> THEY WENT UP 5% ON THE "BIRD
BOX."
CHERYL: THERE YOU GO.
YOU THINK THEY ARE OVERVALUED?
>> IT'S NOT A SUSTAINABLE
BUSINESS MODEL.
THEY NEED SOMEBODY TO PARTNER
WITH.
APPLE IS A REALLY GOOD ONE.
GOOGLE, IF THEY DECIDE TO GET
BEHIND PIXEL, THEIR HARDWARE,
THEY CAN DO IT.
MICROSOFT, SITTING THERE WITH
XBOX.
NO CONTENT.