STOCK TURNS LOWER.
RECENT OUTLOOK, WHATEVER YOU
HAVE.
>> GETTING NUMBER FOR EARNINGS
WHICH IS $1.30.
I'M STILL GOING THROUGH SOME OF
THE LINES HERE.
BECAUSE IF THAT IS APPLES TO
APPLES THAT WOULD BE A HUGE BEAT
BECAUSE WALL STREET WAS LOOKING
FOR EARNINGS OF 53 CENTS A
SHARE.
SO I MEAN THAT WOULD REPRESENT
AS I SAID, BETTER THAN 80% BEAT
OBVIOUSLY ON THAT FRONT.
I WILL JUST MAKE SURE IT IS
APPLES TO APPLES.
THAT IS THE FIRST NUMBER THAT
CROSSED.
FOR REVENUE, EVER SO SLIGHTLY
HIGHER.
SO WALL STREET LOOKING FOR
5.45 BILLION WHICH WOULD BE 30%
INCREASE QUARTER ON QUARTER.
NETFLIX POSTING SLIGHTLY HIGHER
AT 5.47 BILLION.
ONE THING I DO WANT TO CALL YOUR
ATTENTION TO THOUGH IS THE
FORECAST AND THE FORECAST FOR
THIS CURRENT QUARTER, THE FIRST
QUARTER, DOES LOOK A LITTLE BIT
LIKE.
I'M REALLY BEING PICKY HERE BUT
5.76 BILLION IS WHAT WAS
EXPECTED.
I'M SEEING INDICATIONS FROM THE
COMPANY AT 5.7 BILLION.
CONNELL: THAT'S THE REVENUE.
THAT'S A LITTLE LIGHT FIRST
QUARTER.
>> FOR CURRENT QUARTER.
NOT TO BE CONFUSED FOR THE
FOURTH QUARTER WHICH I'M STILL
GOING THROUGH THE FIGURES.
I WANT TO HIGHLIGHT DURING THE
REGULAR SESSION, VOLUME WAS
DOUBLE THE NORMAL USUAL.
THANKS TO OUR BRAIN HERE CHARLIE
BRADY TELLING ME THAT.
MELISSA: CAN I GIVE YOU OTHER
NUMBERS WHILE YOU WERE TALKING
THERE, DEIRDRE?
>> PLEASE.
MELISSA: FOURTH QUARTER PAID NET
ADDITIONS 8.76 MILLION.
FOURTH QUARTER GLOBAL STREAMING
PAID MEMBERSHIP, 167.09 MILLION.
AND THEN THERE IS THE
FORECASTING FOR --
>> MELISSA, CHARLIE, I HAVE TWO
VOICES IN MY HEAD WHICH IS
ACTUALLY EVEN --
CONNELL: KIND OF LOW.
>> LOW FOR MY COUNT.
AS YOU SAID THERE, THAT GLOBAL
STREAMING NET ADDS 8.76 MILLION.
THAT IS CERTAINLY THE RIGHT
NUMBER TO FOCUS ON.
SO THAT IS HIGHER WHAT
WALL STREET WAS LOOKING FOR.
HIGHER EVEN THAN WHAT NETFLIX
HAD GUIDED.
THIS IS REALLY WHERE
WALL STREET, ANALYST COMMUNITY,
INVESTMENT COMMUNITY IS LOOKING
FOR GROWTH.
RICH GREENFIELD SAYING, IF YOU
ARE ESSENTIALLY LOOKING FOR THIS
COMPANY TO BE GROWING IN
NORTH AMERICA, YOU'RE MISSING
THE MARK.
IN FACT IS HE SAYING FOR THE
PAST THREE YEARS IN FACT, IF YOU
BOUGHT THE STOCK IT IS REALLY
BECAUSE YOU'RE OPTIMISTIC ABOUT
THE INTERNATIONAL EXPANSION.
THAT PARTICULAR NUMBER PROVES
IT.
HE IS SAYING LISTEN, NOT HARD TO
IMAGINE NETFLIX REACHING BETWEEN
200, 250 MILLION INTERNATIONAL
SUBSCRIBERS IN THE NEXT FEW
YEARS.
SO IF YOU WILL BE OPTIMISTIC,
YOU'RE BEING OPTIMISTIC BECAUSE
OF IS POTENTIAL GROWTH I SHOULD
SAY IN INDIA AND EMERGING
MARKETS.
CONNELL: WE'LL COME BACK TO THAT
IN A MOMENT, DEEDER.
WANT TO BRING LIZ, SCOTT BACK
AND JEREMY OWENS.
JEREMY IS THE TECH EDITOR AT
MARKET LAUNCH.
THAT IS THE BROAD PICTURE
CONVERSATION I FEEL LIKE.
WE TALKED ABOUT HOW DISNEY PLUS
IS IN THE GAME, STREAMING WARS
ARE ALL ON.
ALL OF THAT IS TRUE, DISNEY IS
NOT IN THE GAME OVERSEAS YET
REALLY.
IN OTHER WORDS, IN THE
SECOND QUARTER THIS YEAR WE'LL
SEE A LAWN OF DISNEY PLUS IN
WESTERN EUROPE.
AND THEN, NETFLIX MIGHT HAVE A,
MAYBE A LITTLE RUN FOR ITS MONEY
OVER THERE.
FOR NOW TO DEIRDRE'S POINT,
NETFLIX IT IS GAME.
IT STILL HAS A LOT OF PLAYING
FIELD TO ITSELF IS OVERSEAS.
THAT IS WHERE THE GROWTH IS
COMING FROM.
>> BY THE WAY THE NUMBER OF
ADDITIONS IS HUGE AND MUCH
BETTER THAN EXPECTED.
I THINK WHAT NETFLIX HAS BEEN
TRYING TO TELL PEOPLE, YEAH,
DISNEY IS IMPORTANT, APPLE IS
IMPORTANT, ALL THESE COMPETITORS
WILL BE A, TRUTH HALF OF IT.
V IS CONSUMED THE OLD-FASHIONED
WAY.
THAT IS WHERE WE MAKE HEADWAY
AND EVERYONE MAKING HEADWAY.
FROM MY PERSPECTIVE, IS 24.
24 NOMINATION THIS IS COMPANY
GOT IN THE OSCARS THIS YEAR.
THAT IS A GIGANTIC THING.
IF I WERE AN ANALYST COVERING
NETFLIX I WOULD BE MOST
INTERESTED HOW ARE THEY SPENDING
$15 BILLION A YEAR ON CONTENT?
HOW WILL THAT IMPACT THE FUTURE?
NOBODY IS IN THAT GAME TO THE
EXTENT NETFLIX IS.
WE SEE NOW IT IS WORKING FOR
THEM.
>> ADD ONE MORE THING,
FORECASTING FOR THE FIRST
QUARTER, GLOBAL STREAMING NET
PAID ADDITIONS ANOTHER SEVEN
MILLION.
8.76 FOR THE FOURTH QUARTER.
THEY WILL SEE, THEY'RE
FORECASTING ANOTHER SEVEN
MILLION FOR THE NEXT ONE.
CONNELL.
CONNELL: ANOTHER THING, SORRY
LIZ, TO JUMP ON YOU, ANOTHER
THING, JEREMY YOU CAN JUMP IN
HERE, I THINK IS KIND OF
INTERESTING, WITH A COMPANY LIKE
NETFLIX, TECHNOLOGY COMPANY LIKE
THIS THAT REPORTS EARNINGS AT
4.07 P.M., SAY, THE STOCK
NORMALLY MOVE AS LOT MORE.
THIS IS VERY MUTED REACTION NOR
NETFLIX.
I THINK THE OPTIONS MARKET,
JEREMY WAS PRICING IN 6% MOVE UP
OR DOWN TOMORROW.
IF THIS HOLDS WE'LL NOT GET
ANYTHING CLOSE TO THAT BUT
NETFLIX BASICALLY, SEEMS LIKE
TOLD US THERE IS SOME DETAILS TO
GO THROUGH BUT TOLD US A LOT OF
WHAT WE WERE EXPECTING IT TO,
BETTER IN SOME PLACES A LITTLE
LIGHT IN OTHERS BUT WHAT IS YOUR
OVER ALL IMPRESSION.
>> I THINK THE TIME THE WAY
PEOPLE REACT TO NETFLIX HAS
CHANGED.
THE STOCK WENT CRAZY AFTER WE
ANNOUNCED NUMBER OF SUBSCRIBERS.
NOW WE SEE THAT CHANGE.
THE NUMBER OF SUBSCRIBERS WILL
NOT BE AS IMPORTANT ON A
QUARTERLY BASIS ESPECIALLY IN
THE U.S. YOU SAW IT GO UP AND
DOWN, THE U.S. MISSED.
ADDITIONS OF MORE THAN 600,000.
THEY EXPECTED MORE THAN 600,000.
THAT IS CANADA.
LESS THAN 500,000 IN THE U.S. WE
WILL SEE A LOT OF CHURN IN THE
U.S. THEY WILL HAVE TO START
VALUING COMPANY DIFFERENTLY THAN
HOW MANY SUBSCRIBERS DID I HAD
ADD?
WE'RE HAPPENING TO SEE A SEA
CHANGE IN NETFLIX.
CONNELL: THANK YOU.
DEIRDRE.
WHAT ELSE?
>> VERY QUICKLY, I'M SURE
NETFLIX INVESTORS WILL BE HAPPY
TO HEAR BECAUSE THERE IS ANOTHER
METRIC TO LOOK AT, NET ADDS,
GLOBAL NET ADDS, DOMESTIC AND
INTERNATIONAL, THEY'RE
FORECASTING A LIGHTER CURRENT
QUARTER.
THIS IS PART OF THEIR GUIDANCE.
INSTEAD OF ADDING 8.82 MILLION
WHICH IS WHAT THE WALL STREET
COMMUNITY WAS LOOKING FOR.
NETFLIX CONFIRMING THEY SHOULD
ADD GLOBALLY SEVEN MILLION.
THAT IS ACTUALLY THE CURRENT
QUARTER.
THAT IS REALLY A LOT LIGHTER.
BACK TO YOU GUYS.
CONNELL: NOT MUCH OF A SELLOFF
IF THAT IS THE RIGHT AFTER-HOURS
QUOTE RIGHT NOW, SCOTT.
YOU COME BACK UP ON THIS.
BECAUSE THAT IS INTERESTING.
I THINK SOMETIMES PEOPLE CONFUSE
THE INTERNATIONAL GROWTH WITH
THE GLOBAL GROWTH WHICH
OBVIOUSLY WOULD INCLUDE THE U.S.
>> AND CANADA.
CONNELL: THERE IS NETFLIX DOWN
BY 3%.
GO AHEAD, SCOTT.
>> IT IS A PRETTY GOOD REVERSAL
IF YOU LOOK AT THE INITIAL POP.
I THINK JEREMY IS RIGHT.
YOU HAVE TO LOOK AT DIFFERENT
WAYS AS FAR AS THE SUB NUMBERS.
FRANKLY WHILE THIS NUMBER IS
RIGHT DOWN THE MIDDLE OF THE
FAIRWAY AS YOU COMMENTED WHILE
THE MARKET DIDN'T MOVE THE STOCK
MUCH, IT IS PROBABLY NOT GOOD
ENOUGH.
CONNELL: NO.
>> I SAID EARLIER THE MARKET
RALLIED THE STOCK PRETTY GOOD
AFTER 3 1/2 MONTHS AFTER THIS
EARNINGS REPORT WHICH WAS NOT A
GREAT ONE IN THE QUARTER BEFORE
AND CERTAINLY NOT A GREAT ONE IN
THE QUARTER PRIOR TO THAT.
THESE NUMBERS ARE NOT GOOD
ENOUGH FOR NETFLIX TO TAKEN MAIN
VALUATION LEVELS.
IF YOU HAVE TRAPPED IN THE STOCK
FOR A YEAR OR SO I THINK THIS IS
A CHANCE TO DIVEST.
CONNELL: THAT IS THE STOCK PAR
OF IT, JEREMY, LIZ WILL JUMP IN
ON THE COMMENTS ON BUSINESS SIDE
OF IT, WHAT ABOUT THE FUTURE?
LET'S TALK ABOUT IT A LITTLE BIT
NOW.
WE KNOW DISNEY IS IN THE GAME.
APPLE IN A DIFFERENT WAY.
WE KNOW HBO IS COMING ON.
WE KNOW THE THE PEACOCK NETWORK
IS ANNOUNCED.
NETFLIX HAS TO PAY TONS AND TONS
OF MONEY FOR CONTENT.
PEOPLE BROUGHT UP NUMBER OF
TILES THIS WEEK, FINALLY HAVING
ADS ON THE PLATFORM.
WHAT DO YOU THINK?
>> I THINK THEIR CONTENT WILL
MATTER A LOT MORE NOW THAN IT
HAS.
THEY HAVE BEEN IN THE GROWTH
PHASE.
NOW WE'RE IN A CHURN PHASE.
CONSUMERS ARE GOING TO DECIDE
ALMOST BY THE MONTH IF THEY WANT
TO PAY FOR NETFLIX FOR NEXT
MONTH OR PAY FOR HBO OR PAY FOR
DISNEY PLUS AND A LOT OF THAT
DEPEND ON WHAT CONTENT IS COMING
UP.
NETFLIX IS GETTING THE CONTENT
TRAIN ROLLING AND THEY WILL KEEP
ON PUTTING OUT AND IF YOU LOOK
IN THEIR LETTER THEY TALK ABOUT
WHAT CONTENT COMES OUT IN IN Q1
AND Q2.
Q2 WOULD BE HEAVY.
WHY THE Q1 IS KIND OF LIGHT.
THEY THINK THE BIG GAINS COME IN
Q2.
CONNELL: NETFLIX MADE COMMENTS
ON THE FOURTH QUARTER, DESPITE
THE DEBUT OF DISNEY PLUS AND
LAUNCH OF APPLE TV PLUS, VIEWING
PER MEMBERSHIP, LIZ, GREW, BOTH
GLOBALLY AND IN THE U.S. TRYING
TO POINT OUT TO INVESTORS AND
EVERYBODY ELSE, HEY WE KNOW
OTHER PLAYERS ARE IN THIS GAME
NOW BUT WE'RE STILL GROWING
ALBEIT IN A MORE COMPETITIVE
ENVIRONMENT.
WHAT DOES THAT ENVIRONMENT LOOK
LIKE TO YOU, LIZ?
>> AGAIN I THINK THE FUTURE
BELONGS TO WHOEVER HAS SOMETHING
YOU REALLY WANT TO WATCH ON
TELEVISION OR ON YOUR APPLE
IPAD OR WHATEVER.
AS LONG AS THEY HAVE THOSE
PROPERTIES, BY THE WAY, DISNEY
DOES TOO.
IT IS NOT LOOK THERE IS ROOM FOR
ONLY ONE PLAYER IN THIS GAME AND
WE'LL ALL BE OBSESSING OVER
NUMBER OF DOMESTIC SUBSCRIBERS
EVERY QUARTER AND STUFF, THE
REALLY IMPORTANT THING WHO CAN
REALLY OWN YOUR ATTENTION SPAN,
WHO CAN REALLY OWN YOUR TIME,
ADS, KILLER IDEA, TERRIBLE.
I CAN'T IMAGINE THAT WOULD BE A
GOOD IDEA.
THAT IS WHY WE DON'T WANT
TELEVISION.
CONNELL: YOU'RE RIGHT.
ONE TIME MELISSA AND I TALKED
ABOUT THIS, GOOD TIME TO BE
CREATING CONTENT.
>> ABSOLUTELY.
THAT IS THE GAME.
CONNELL: NOT A LOT OF PEOPLE
KNOW THIS SCOTT MARTIN IS
WRITING A NEW SITCOM ABOUT A
TRADER.
>> THE SECRET IS OUT.
YOUR CONTENT IS RIGHT.
THE WEIRD THING ABOUT NETFLIX
THOUGH, WHERE ARE THEY IN THAT
CONTENT GAME?
YOU SEEN AMAZON PRIME, SOME
OTHER SERVICES START TO CREATE
NICE SHOWS.
I GOT HOOKED ON NETFLIX
ADMITTEDLY THE COUPLE YEARS AGO,
THE MOVIE, "BABYSITTER" A
ORIGINAL COMEDY THAT WAS VERY
GOOD.
THE CONTENT HAS TAKEN A DOWNTURN
AND DISNEY PLUS AND OTHER GUYS
COMING OUT ARE A LEGITIMATE
THREAT.
CONNELL: BOY.
I DON'T WANT TO KNOW IF I WENT
WITH "THE BABYSITTER."
>> I WILL ADMIT IT RIGHT NOW.
>> REALLY EMBARRASSING.
CONNELL: CAN WE MAKE A BANNER AT
BOTTOM OF THE SCREEN.
LIZ PEEK, VERY EMBARRASSING,
SCOTT MARTIN.