1 00:00:02,440 --> 00:00:06,800 Speaker 1: Bloomberg Audio Studios, podcasts, radio News. 2 00:00:07,040 --> 00:00:09,039 Speaker 2: This was a blowout number. I can feel like it 3 00:00:09,160 --> 00:00:12,560 Speaker 2: shocked all of us. First quarter streaming paid net change 4 00:00:12,680 --> 00:00:15,200 Speaker 2: in terms of the subscribers up nine point three to 5 00:00:15,320 --> 00:00:18,760 Speaker 2: three million. Timmy estimate was four point eight four million. 6 00:00:18,920 --> 00:00:21,400 Speaker 3: That's not the only beat. First quarter EPs coming at 7 00:00:21,440 --> 00:00:23,639 Speaker 3: five dollars and twenty eight cents per share. Estimates were 8 00:00:23,680 --> 00:00:26,400 Speaker 3: for four dollars and fifty two cents. The company also 9 00:00:26,560 --> 00:00:29,960 Speaker 3: out with second quarter EPs the guidance four sixty eight 10 00:00:30,000 --> 00:00:33,240 Speaker 3: versus estimates of four to fifty four, and then another 11 00:00:33,240 --> 00:00:35,479 Speaker 3: big headline. We should note they're going to end reporting 12 00:00:35,600 --> 00:00:38,320 Speaker 3: quarterly membership numbers next year. We got a great group 13 00:00:38,400 --> 00:00:39,920 Speaker 3: of folks with us right now to help us break 14 00:00:39,920 --> 00:00:42,599 Speaker 3: down these numbers. Paul Sweeney is co host of Bloomberg Surveillance. 15 00:00:42,600 --> 00:00:44,200 Speaker 3: He joins us on the phone from New Jersey. Paul 16 00:00:44,240 --> 00:00:46,760 Speaker 3: spent thirty years as a media analyst, also with US 17 00:00:46,760 --> 00:00:49,760 Speaker 3: as Bloomberg News earnings reporter Red Brown. Hey, Paul, I 18 00:00:49,800 --> 00:00:51,120 Speaker 3: want to start with you, because I got to tell you, 19 00:00:51,360 --> 00:00:54,760 Speaker 3: I'm pretty surprised by the reaction to these numbers, considering 20 00:00:54,800 --> 00:00:57,520 Speaker 3: they were it was such a blowout quarter Why do 21 00:00:57,520 --> 00:00:59,640 Speaker 3: you think the stock is moving lower in the after hours. 22 00:01:00,240 --> 00:01:02,120 Speaker 4: Yeah, I think it's a little bit by the rumor. Still, 23 00:01:02,160 --> 00:01:04,200 Speaker 4: the news people have been hyping up this quarter as 24 00:01:04,200 --> 00:01:07,280 Speaker 4: a really big quarter because you know, the paid subscription 25 00:01:07,480 --> 00:01:09,959 Speaker 4: was going to fuel subscriber growth. Yet again, you're that 26 00:01:10,040 --> 00:01:12,640 Speaker 4: a big beat on subs last quarter. Some the stock 27 00:01:12,720 --> 00:01:15,959 Speaker 4: was up about twenty five percent since they reported in January, 28 00:01:15,959 --> 00:01:17,880 Speaker 4: so it's probably just taking back some of those games. 29 00:01:17,880 --> 00:01:20,559 Speaker 4: But you know, across the board, the subscriber numbers really 30 00:01:20,640 --> 00:01:23,840 Speaker 4: really were impressive. One thing to note about that big 31 00:01:23,880 --> 00:01:25,920 Speaker 4: subscriber beat to the last couple of quarters. These are 32 00:01:26,000 --> 00:01:29,400 Speaker 4: kind of short term phenomena, as you know, they the 33 00:01:29,400 --> 00:01:32,720 Speaker 4: people that were sharing accounts now are paying for their owns, 34 00:01:32,560 --> 00:01:35,560 Speaker 4: and that'll fade out over the next several quarters and 35 00:01:35,800 --> 00:01:38,479 Speaker 4: then the focus will become, i think, on the advertising 36 00:01:38,560 --> 00:01:40,240 Speaker 4: side of the business as well. 37 00:01:40,520 --> 00:01:42,840 Speaker 2: Yeah, it's interesting. Do you care, Paul to hear that 38 00:01:42,840 --> 00:01:45,600 Speaker 2: they're going to end reporting quarterly membership numbers next year? 39 00:01:45,920 --> 00:01:47,480 Speaker 2: It feels like it's something we focus on. 40 00:01:47,600 --> 00:01:50,680 Speaker 4: Yeah, yeah, it really is, and that quite frankly, that 41 00:01:50,720 --> 00:01:54,160 Speaker 4: had been the primary driver of this stock really since 42 00:01:54,240 --> 00:01:57,600 Speaker 4: it switched to this digital streaming format. That was the 43 00:01:57,760 --> 00:02:00,600 Speaker 4: metric that moved this stock. The company really wants to 44 00:02:00,640 --> 00:02:03,600 Speaker 4: get away from that and get more towards Hey, guys, 45 00:02:03,680 --> 00:02:06,840 Speaker 4: just view us as you would any other company stock. 46 00:02:06,880 --> 00:02:09,880 Speaker 4: Look at revenue, look at cash flow, look at profitability, 47 00:02:10,240 --> 00:02:12,320 Speaker 4: all those types of things, and let's focus less on 48 00:02:12,440 --> 00:02:15,640 Speaker 4: subscriber growth because quite frankly, we pretty much got pretty 49 00:02:15,720 --> 00:02:17,920 Speaker 4: much everybody that's out there, So it's really not so 50 00:02:17,960 --> 00:02:20,359 Speaker 4: much as a subscriber story. It's more how much money 51 00:02:20,360 --> 00:02:21,519 Speaker 4: can we make off each subscriber? 52 00:02:21,600 --> 00:02:23,040 Speaker 3: Paul one one more to you. And then I want 53 00:02:23,040 --> 00:02:25,360 Speaker 3: to bring in Red Brown, our earnings reporter, who's been 54 00:02:25,360 --> 00:02:28,800 Speaker 3: watching these numbers closely. Why would a company? Is there 55 00:02:28,840 --> 00:02:31,680 Speaker 3: any positive way to read into a company like Netflix? 56 00:02:31,760 --> 00:02:34,519 Speaker 3: No longer reporting this? I mean, no question, the more 57 00:02:34,600 --> 00:02:37,560 Speaker 3: data for investors the better. Is this a negative? This 58 00:02:37,639 --> 00:02:38,520 Speaker 3: is a negative sign? 59 00:02:38,560 --> 00:02:38,640 Speaker 2: No? 60 00:02:39,400 --> 00:02:41,720 Speaker 4: Oh yeah, I think I think for an investor in 61 00:02:41,760 --> 00:02:45,359 Speaker 4: an analyst, you always want more information, particularly when it's 62 00:02:45,400 --> 00:02:49,080 Speaker 4: critical information in terms of what drives the growth of 63 00:02:49,120 --> 00:02:51,480 Speaker 4: the business. And it's obviously just it's subscribers and how 64 00:02:51,560 --> 00:02:54,480 Speaker 4: much revenue you dandergenerate off each subscriber. It's pretty simple. 65 00:02:54,639 --> 00:02:56,240 Speaker 4: So I need take one of those data points away. 66 00:02:56,480 --> 00:02:59,360 Speaker 4: But we've seen other companies in other industries do that, 67 00:03:01,000 --> 00:03:04,200 Speaker 4: subscriber based industries. They try to get you away from 68 00:03:04,200 --> 00:03:07,200 Speaker 4: that number and get you back to where are Look 69 00:03:07,480 --> 00:03:09,799 Speaker 4: how they are managing the business, and what they're telling 70 00:03:09,880 --> 00:03:12,560 Speaker 4: you is we're not managing the business to maximize subscriber 71 00:03:12,639 --> 00:03:15,120 Speaker 4: with We're managing the business to maximize revenue and profit 72 00:03:15,600 --> 00:03:19,399 Speaker 4: per user. That's our management focus and that's how we 73 00:03:19,440 --> 00:03:20,920 Speaker 4: look at it, and that's how we think you should 74 00:03:20,960 --> 00:03:21,360 Speaker 4: look at it. 75 00:03:21,480 --> 00:03:23,320 Speaker 2: Red Brown, come on in on it. We talk earnings 76 00:03:23,320 --> 00:03:25,800 Speaker 2: with you all the time. You know, I'm watching Netflix 77 00:03:25,840 --> 00:03:29,320 Speaker 2: shares that have been bouncing around in the aftermarket, a 78 00:03:29,320 --> 00:03:31,400 Speaker 2: lot of moves right now. The stocks still lower down 79 00:03:31,400 --> 00:03:32,560 Speaker 2: about three and a half percent. 80 00:03:33,200 --> 00:03:35,480 Speaker 1: Yeah, I mean, I think what might be explaining a 81 00:03:35,480 --> 00:03:37,240 Speaker 1: little bit of the negative movement too, is we saw 82 00:03:37,280 --> 00:03:41,040 Speaker 1: them actually boost their full year outlook for operating margin. 83 00:03:41,360 --> 00:03:44,880 Speaker 1: They beat EPs in the first quarter. They their guidance 84 00:03:44,880 --> 00:03:46,920 Speaker 1: to the second quarter was ahead of estimates as well. 85 00:03:47,640 --> 00:03:49,000 Speaker 1: But it seems like there's a little bit of a 86 00:03:49,000 --> 00:03:51,800 Speaker 1: disconnect between the full year number. If you know, those 87 00:03:51,840 --> 00:03:54,720 Speaker 1: two pretty healthy beats are not translating to the full year, 88 00:03:55,720 --> 00:03:59,280 Speaker 1: analysts investors might start to question maybe where in the 89 00:03:59,440 --> 00:04:01,200 Speaker 1: back half of the year is are things starting to 90 00:04:01,200 --> 00:04:03,720 Speaker 1: slow down as well? So I think that might also 91 00:04:03,760 --> 00:04:05,600 Speaker 1: be factoring in here a little bit to the to 92 00:04:05,640 --> 00:04:07,280 Speaker 1: the negative price movement we're seeing. 93 00:04:07,400 --> 00:04:08,960 Speaker 2: Let's speak a little bit to what Paul was saying, 94 00:04:08,960 --> 00:04:10,760 Speaker 2: and I think it's a good point that we talked 95 00:04:10,800 --> 00:04:13,240 Speaker 2: about it earlier. Just you know, this stock has been 96 00:04:13,280 --> 00:04:16,320 Speaker 2: on fire this year, and you know, it looks like 97 00:04:16,360 --> 00:04:19,040 Speaker 2: the numbers are are pretty upbeat, but it has been 98 00:04:19,120 --> 00:04:22,960 Speaker 2: such an outperformer this year, and I just do wonder 99 00:04:22,960 --> 00:04:24,360 Speaker 2: how much of that is at play as well. 100 00:04:24,680 --> 00:04:27,120 Speaker 1: Yeah, I mean, if you look at what analysts are 101 00:04:27,720 --> 00:04:29,680 Speaker 1: rating for the stock, that it's kind of topped out 102 00:04:29,720 --> 00:04:33,000 Speaker 1: at the analyst ratings point at this point. So you know, 103 00:04:33,360 --> 00:04:36,960 Speaker 1: even with these really impressive numbers, maybe the it's just 104 00:04:37,040 --> 00:04:39,719 Speaker 1: kind of a hit hit its ceiling for the time being. 105 00:04:40,000 --> 00:04:42,560 Speaker 3: Hey, Red, it's so interesting, you know, I was saying 106 00:04:42,560 --> 00:04:44,760 Speaker 3: as we were going into our Beyond the Bell our 107 00:04:45,480 --> 00:04:47,880 Speaker 3: coverage with TV as we you know, waited for these 108 00:04:47,880 --> 00:04:50,520 Speaker 3: Netflix earnings, I was saying, you know, this could really 109 00:04:50,560 --> 00:04:52,839 Speaker 3: set the tone for the quarter for a lot of 110 00:04:52,839 --> 00:04:54,960 Speaker 3: the consumer tech companies that are set to report in 111 00:04:55,000 --> 00:04:58,359 Speaker 3: the coming weeks, and yet yet we get a blowout 112 00:04:58,440 --> 00:05:00,880 Speaker 3: number pretty much across the board, and we see a 113 00:05:00,920 --> 00:05:02,720 Speaker 3: negative reaction like this, and I'm wondering how we can 114 00:05:02,760 --> 00:05:04,320 Speaker 3: extrapolate this beyond Netflix. 115 00:05:04,760 --> 00:05:07,440 Speaker 1: Yeah, it's a good question. I mean, people have been 116 00:05:07,480 --> 00:05:09,880 Speaker 1: really focused on earnings this quarter, and a lot of 117 00:05:09,960 --> 00:05:12,159 Speaker 1: analysts are saying, you know, focus on the numbers, don't 118 00:05:12,160 --> 00:05:15,320 Speaker 1: buy unto the hype and has really big implications for 119 00:05:15,480 --> 00:05:19,200 Speaker 1: the stock market at general at the moment. So I 120 00:05:19,200 --> 00:05:21,760 Speaker 1: don't know if people kind of are on edge and 121 00:05:21,800 --> 00:05:25,000 Speaker 1: looking for any excuse to sell at the moment. Yeah, 122 00:05:25,000 --> 00:05:28,599 Speaker 1: it could paint a pessimistic picture for the remainder of 123 00:05:28,640 --> 00:05:29,920 Speaker 1: the quarter here, probably for us. 124 00:05:30,000 --> 00:05:31,880 Speaker 2: Paul Sweenie, come on back in here. I'm just thinking, 125 00:05:31,920 --> 00:05:33,560 Speaker 2: you know, we're getting ready for the analyst calls, and 126 00:05:33,560 --> 00:05:34,799 Speaker 2: I feel like there's going to be a fair amount 127 00:05:34,800 --> 00:05:37,359 Speaker 2: of questions, especially as you see the stock kind of 128 00:05:37,360 --> 00:05:39,600 Speaker 2: bouncing around here. What's kind of the top one or 129 00:05:39,600 --> 00:05:41,520 Speaker 2: two questions that you would want to be putting up 130 00:05:41,839 --> 00:05:42,480 Speaker 2: on that call. 131 00:05:43,480 --> 00:05:46,200 Speaker 4: Yeah, one revenue and one cost question. The revenue side 132 00:05:46,240 --> 00:05:50,119 Speaker 4: is talk to us about the advertising component how well 133 00:05:50,200 --> 00:05:53,240 Speaker 4: is that catching on with subscribers. How many subscribers are 134 00:05:53,320 --> 00:05:56,400 Speaker 4: going to the advertising tier and that's a big thing 135 00:05:56,360 --> 00:05:58,200 Speaker 4: because that's gonna be one of the drivers going forward. 136 00:05:58,400 --> 00:05:59,960 Speaker 4: And then a second one on the call side is 137 00:06:00,279 --> 00:06:02,919 Speaker 4: where are we on our programming budget? You need to 138 00:06:02,920 --> 00:06:06,120 Speaker 4: spend more to drive more subscriber growth? Or or is 139 00:06:06,160 --> 00:06:08,040 Speaker 4: a company and a good level of spend because if 140 00:06:08,040 --> 00:06:10,359 Speaker 4: they are at a good level of spend, boy, the 141 00:06:10,400 --> 00:06:13,719 Speaker 4: profits just really start churning for this company and the 142 00:06:13,760 --> 00:06:14,760 Speaker 4: free cash flow as well. 143 00:06:14,800 --> 00:06:16,440 Speaker 3: I do want to bring in some of the advertising 144 00:06:16,480 --> 00:06:19,240 Speaker 3: information that you mentioned, Paul in the letter. The company 145 00:06:19,520 --> 00:06:21,720 Speaker 3: did come out and say that ADS membership grew sixty 146 00:06:21,720 --> 00:06:24,880 Speaker 3: five percent quarter on quarter after rising nearly seventy percent 147 00:06:24,920 --> 00:06:27,800 Speaker 3: sequentially in each of Q three twenty three and Q 148 00:06:27,880 --> 00:06:31,000 Speaker 3: four twenty three. They're also saying that over forty percent 149 00:06:31,040 --> 00:06:33,360 Speaker 3: of all sign ups in our ads markets, remember it's 150 00:06:33,400 --> 00:06:36,320 Speaker 3: not fully rolled out, are coming from our ads plan 151 00:06:36,920 --> 00:06:40,840 Speaker 3: for advertisers. The companies focusing on measurement solutions, including new 152 00:06:40,839 --> 00:06:44,600 Speaker 3: partnerships with Kantar and Lucid for brand awareness and recall, 153 00:06:44,640 --> 00:06:47,480 Speaker 3: and then Nielsen Catalina solutions for sales lift Paul, I 154 00:06:47,520 --> 00:06:49,000 Speaker 3: don't have to tell you because you've been covering this 155 00:06:49,040 --> 00:06:51,640 Speaker 3: for years. How wild is it for us to talk 156 00:06:51,640 --> 00:06:54,039 Speaker 3: about Netflix and measurement because this is a company that 157 00:06:54,120 --> 00:06:56,400 Speaker 3: for years was like, we don't care about ratings, We're 158 00:06:56,400 --> 00:06:58,120 Speaker 3: never going to share any numbers. We're never going to 159 00:06:58,120 --> 00:07:00,520 Speaker 3: do ads, never, never, never, And here they are talking 160 00:07:00,520 --> 00:07:03,880 Speaker 3: about yis Yeah, exactly, this is crazy. 161 00:07:04,560 --> 00:07:06,960 Speaker 4: It's a great point. They're going to have to start 162 00:07:07,279 --> 00:07:11,160 Speaker 4: the disclosing audience levels of some degree. But we already 163 00:07:11,200 --> 00:07:13,720 Speaker 4: know that the advertising video on demand model is a 164 00:07:13,840 --> 00:07:18,600 Speaker 4: very successful model. Advertisers are switching some linear TV broadcasting 165 00:07:18,600 --> 00:07:22,440 Speaker 4: cable to the more digital platforms, and they've been itching 166 00:07:22,600 --> 00:07:26,000 Speaker 4: to get to the streaming base of Netflix. So there 167 00:07:26,040 --> 00:07:29,720 Speaker 4: will be a lot of advertisers demand. And you know, 168 00:07:30,280 --> 00:07:32,520 Speaker 4: Netflix is going to have to provide the advertisers and 169 00:07:32,560 --> 00:07:35,000 Speaker 4: their agencies with some data the consistent they can just 170 00:07:35,040 --> 00:07:36,960 Speaker 4: get a sense of pricing and value. 171 00:07:37,240 --> 00:07:37,640 Speaker 5: Yeah, you know. 172 00:07:37,680 --> 00:07:40,080 Speaker 2: And the other thing is like I'm thinking about content, right, 173 00:07:40,160 --> 00:07:42,720 Speaker 2: you know, original content versus licensing. And when we were 174 00:07:42,720 --> 00:07:44,680 Speaker 2: talking with Githa rang an ant On earlier, she said, 175 00:07:44,680 --> 00:07:47,360 Speaker 2: you know, one of the upsides is that they are 176 00:07:47,440 --> 00:07:48,840 Speaker 2: you know, doing a lot of licensing deals. 177 00:07:48,840 --> 00:07:49,480 Speaker 5: They had suits. 178 00:07:49,760 --> 00:07:51,600 Speaker 2: They just did something with Sex and the City that's 179 00:07:51,680 --> 00:07:53,720 Speaker 2: just coming out. I mean, when you think about it, 180 00:07:53,800 --> 00:07:56,120 Speaker 2: Paul as an analyst and somebody who understands the space, 181 00:07:56,200 --> 00:07:59,080 Speaker 2: I mean, cheaper to do a licensing deal versus creating 182 00:07:59,080 --> 00:08:00,000 Speaker 2: that original content. 183 00:08:01,160 --> 00:08:04,920 Speaker 4: It is generally speaking, it is much cheaper to license 184 00:08:05,000 --> 00:08:07,480 Speaker 4: the show than to create it, particularly the shows that 185 00:08:07,600 --> 00:08:11,600 Speaker 4: they make, which are extraordinarily high quality, and they have 186 00:08:11,800 --> 00:08:14,800 Speaker 4: very big budgets and other good and that's the that's 187 00:08:14,840 --> 00:08:17,400 Speaker 4: the investment part. The good is is it does drive 188 00:08:17,480 --> 00:08:20,240 Speaker 4: subscriber growth. So I think most investors would say that's 189 00:08:20,240 --> 00:08:23,000 Speaker 4: a good investment to make in original programming. But you 190 00:08:23,080 --> 00:08:25,480 Speaker 4: got to find a balance here and so, and that's 191 00:08:25,440 --> 00:08:26,920 Speaker 4: the same. And that's true for the media companies. They 192 00:08:26,920 --> 00:08:29,680 Speaker 4: have to find a balance on what they licensed to 193 00:08:29,680 --> 00:08:31,680 Speaker 4: Netflix and what they keep on their own streaming services. 194 00:08:32,320 --> 00:08:34,640 Speaker 3: Red Let's say you had a chance to ask management 195 00:08:34,679 --> 00:08:36,960 Speaker 3: a question today on the call that's coming up. What 196 00:08:37,080 --> 00:08:37,720 Speaker 3: do you want to hear about. 197 00:08:37,800 --> 00:08:39,680 Speaker 1: Yeah, I mean we're talking about programming and what's going 198 00:08:39,760 --> 00:08:41,440 Speaker 1: to be driving growth in the future. I think there's 199 00:08:41,440 --> 00:08:44,440 Speaker 1: a big question around sports. Yeah, what what what level 200 00:08:44,480 --> 00:08:47,200 Speaker 1: of investment are they planning on putting in that that area. 201 00:08:47,320 --> 00:08:51,280 Speaker 1: We know it's highly competitive, it's really crowded, it's very expensive. 202 00:08:52,000 --> 00:08:53,920 Speaker 1: They are kind of stipping their toe in with some 203 00:08:53,960 --> 00:08:56,640 Speaker 1: of these combat sports. But yeah, it would be w 204 00:08:56,880 --> 00:08:59,960 Speaker 1: E WWE the Jake Paul and Mike Tyson fight later 205 00:09:00,040 --> 00:09:02,600 Speaker 1: this summer. We will want to hear kind of what 206 00:09:02,679 --> 00:09:04,800 Speaker 1: is their strategy. They've been on the sidelines for a 207 00:09:04,840 --> 00:09:08,040 Speaker 1: while now, and you know, have they been able to 208 00:09:08,080 --> 00:09:11,960 Speaker 1: see the mess that sports streaming has been from, you know, 209 00:09:12,000 --> 00:09:14,000 Speaker 1: paying billions and millions of dollars? Do they have a 210 00:09:14,000 --> 00:09:16,640 Speaker 1: different strategy like they have in so many other cases 211 00:09:16,880 --> 00:09:17,640 Speaker 1: in the market. 212 00:09:18,120 --> 00:09:20,640 Speaker 2: I do wonder too, And I'm just looking at something 213 00:09:20,679 --> 00:09:23,400 Speaker 2: like a Walt Disney in the aftermarket, and obviously it's 214 00:09:23,400 --> 00:09:25,800 Speaker 2: not just about streaming. It's just down slightly down about 215 00:09:25,800 --> 00:09:30,400 Speaker 2: one tenth of one percent here, Warner Brothers, Discovery, same story. 216 00:09:30,440 --> 00:09:32,080 Speaker 2: I mean, Paul, is there anything that you kind of 217 00:09:32,080 --> 00:09:35,040 Speaker 2: extrapolgalate when you look at something like a Netflix and 218 00:09:35,080 --> 00:09:36,640 Speaker 2: then what it means for some of the other streaming 219 00:09:36,720 --> 00:09:37,839 Speaker 2: services that are out there. 220 00:09:38,600 --> 00:09:41,320 Speaker 4: I think it's actually all net positive, which is it 221 00:09:41,440 --> 00:09:44,920 Speaker 4: just shows you the strength of the streaming business model. 222 00:09:44,920 --> 00:09:47,520 Speaker 4: We now know when you look at Netflix's financials that 223 00:09:47,559 --> 00:09:52,319 Speaker 4: it can be extraordinarily profitable generate really high returns. So 224 00:09:52,440 --> 00:09:55,720 Speaker 4: now the question is who else can join Netflix with 225 00:09:55,800 --> 00:10:00,920 Speaker 4: those types of financial metrics Ken Disney do it, Warner Brothers, Discovery, 226 00:10:00,960 --> 00:10:03,480 Speaker 4: Ken Powermount. That's kind of the question a lot of 227 00:10:03,520 --> 00:10:06,680 Speaker 4: those investors are asking themselves, but they can be done 228 00:10:06,720 --> 00:10:08,360 Speaker 4: here if you look at Netflix. 229 00:10:08,640 --> 00:10:11,479 Speaker 2: Listen, Paul Sweeney, thank you so much. We so appreciated 230 00:10:11,559 --> 00:10:14,480 Speaker 2: our own Paul Sweeney, who has covered the media industry 231 00:10:14,480 --> 00:10:16,920 Speaker 2: and did as a banker for many years, thirty years 232 00:10:16,920 --> 00:10:19,480 Speaker 2: as a media analyst, so really great to get his insight. 233 00:10:20,160 --> 00:10:22,040 Speaker 2: We're going to continue with Red Brown. We're also going 234 00:10:22,080 --> 00:10:24,720 Speaker 2: to roll into it our Githa Ranganathan, who covers the 235 00:10:24,760 --> 00:10:27,680 Speaker 2: media space for our Bloomberg intelligence team. You know, getha 236 00:10:27,760 --> 00:10:30,160 Speaker 2: you called it on the subscriber number. 237 00:10:30,280 --> 00:10:32,240 Speaker 3: She did, she really did. Can you remind everyone what 238 00:10:32,320 --> 00:10:33,440 Speaker 3: she told us a couple hours ago? 239 00:10:33,600 --> 00:10:35,640 Speaker 2: You said it was going to be a much higher number. 240 00:10:35,720 --> 00:10:38,599 Speaker 2: It is a much higher number. Walk us through the 241 00:10:38,679 --> 00:10:40,199 Speaker 2: quarter and why is it that? 242 00:10:40,240 --> 00:10:40,560 Speaker 5: Though? 243 00:10:40,720 --> 00:10:43,160 Speaker 2: First of all, are you I'm assuming you're watching the 244 00:10:43,200 --> 00:10:45,600 Speaker 2: stock in the aftermarket, it's down about two point six percent. 245 00:10:45,679 --> 00:10:48,560 Speaker 2: It just has been bouncing around a lot. Walk us 246 00:10:48,559 --> 00:10:50,800 Speaker 2: through the quarter, maybe why you think, I mean, should 247 00:10:50,800 --> 00:10:52,240 Speaker 2: investors be disappointed here? 248 00:10:53,600 --> 00:10:57,079 Speaker 6: So absolutely, right, Carol, it was a blowout quarter. I mean, 249 00:10:57,280 --> 00:10:59,160 Speaker 6: I think it came in much higher than expected. We 250 00:10:59,160 --> 00:11:02,240 Speaker 6: were kind of thinking maybe six seven million dollar seven 251 00:11:02,320 --> 00:11:06,480 Speaker 6: million subscriber ads net ads range. This was of course 252 00:11:06,559 --> 00:11:08,480 Speaker 6: way above that. But I think what is really kind 253 00:11:08,520 --> 00:11:11,360 Speaker 6: of causing a little bit of concern here is that 254 00:11:11,440 --> 00:11:16,120 Speaker 6: they are going to stop reporting subscriber metrics altogether, and 255 00:11:16,240 --> 00:11:18,000 Speaker 6: that I think is coming as a little bit of 256 00:11:18,040 --> 00:11:21,640 Speaker 6: a disappointment. I mean, Netflix is out and out a 257 00:11:21,679 --> 00:11:25,720 Speaker 6: subscriber story, or at least it always has been, and 258 00:11:25,760 --> 00:11:27,960 Speaker 6: so this is kind of going to require a complete 259 00:11:28,320 --> 00:11:31,480 Speaker 6: change in the mindset of investors, right. You know, this 260 00:11:31,520 --> 00:11:34,000 Speaker 6: is this was always such an easy model to follow. 261 00:11:34,320 --> 00:11:37,200 Speaker 6: You know, you just multiply subscribers by the monthly price 262 00:11:37,240 --> 00:11:39,000 Speaker 6: that you pay, and you you, you know, you kind 263 00:11:39,040 --> 00:11:41,160 Speaker 6: of have your whole model. But now they're going to 264 00:11:41,160 --> 00:11:44,600 Speaker 6: stop reporting subscriber numbers. They're going to stop reporting the 265 00:11:44,720 --> 00:11:47,640 Speaker 6: average revenue per user. So it's kind of going to 266 00:11:47,760 --> 00:11:52,400 Speaker 6: it's it's definitely becoming. It's I would say, it's gone 267 00:11:52,440 --> 00:11:56,440 Speaker 6: from kind of high growth to now more you know, uh, 268 00:11:56,880 --> 00:12:00,480 Speaker 6: definitely a very profitable company. But obviously they do seem 269 00:12:00,480 --> 00:12:03,520 Speaker 6: to be kind of signaling that subscriber growth that the 270 00:12:03,559 --> 00:12:05,160 Speaker 6: party is going to be over at some point. 271 00:12:05,320 --> 00:12:08,280 Speaker 3: Correct me if I'm wrong, getha. But did Netflix used 272 00:12:08,320 --> 00:12:11,800 Speaker 3: to report churn and then they stopped reporting churn and 273 00:12:11,880 --> 00:12:14,800 Speaker 3: that was a really big deal to investors when that happened. 274 00:12:15,640 --> 00:12:18,760 Speaker 6: That was a very very long time ago. Yes, they did, 275 00:12:19,040 --> 00:12:21,520 Speaker 6: they would, they would mention it, and yeah, they did 276 00:12:21,520 --> 00:12:25,200 Speaker 6: stop reporting it. But subscribers, again, this is the bread 277 00:12:25,280 --> 00:12:28,360 Speaker 6: and butter of this whole streaming business. So I think 278 00:12:28,360 --> 00:12:31,080 Speaker 6: it's it's definitely going to require people are going to 279 00:12:31,080 --> 00:12:32,360 Speaker 6: take some time to kind of digest that. 280 00:12:33,240 --> 00:12:35,480 Speaker 1: Getha. We've seen them, they have started to give us 281 00:12:35,480 --> 00:12:39,480 Speaker 1: a little bit more viewership on information over the past 282 00:12:39,559 --> 00:12:42,160 Speaker 1: year or so. Do you think that that is part 283 00:12:42,240 --> 00:12:44,480 Speaker 1: of or them kind of trying to signal that, you know, 284 00:12:44,559 --> 00:12:46,840 Speaker 1: ads are going to become a bigger part of our business, 285 00:12:46,880 --> 00:12:49,360 Speaker 1: and you know how big of a part of their business. 286 00:12:49,400 --> 00:12:51,040 Speaker 1: Do you think that will be in the next couple 287 00:12:51,080 --> 00:12:51,520 Speaker 1: of years. 288 00:12:52,720 --> 00:12:54,920 Speaker 6: Yeah, so right now, they haven't really given us any 289 00:12:55,000 --> 00:12:58,400 Speaker 6: concrete metrics around advertising, I mean, other than the first 290 00:12:58,480 --> 00:13:00,360 Speaker 6: number that they gave us in January, which was roughly 291 00:13:00,400 --> 00:13:04,319 Speaker 6: about twenty five million active users. They did report something 292 00:13:04,360 --> 00:13:06,760 Speaker 6: today by saying, you know that they've seen like forty 293 00:13:06,760 --> 00:13:08,840 Speaker 6: percent of their new signups are actually on the ad tyear, 294 00:13:08,920 --> 00:13:10,960 Speaker 6: but we don't actually have a concrete number. 295 00:13:11,720 --> 00:13:12,280 Speaker 5: That said. 296 00:13:12,360 --> 00:13:14,800 Speaker 6: I think what they're doing, they're they're they're still kind 297 00:13:14,800 --> 00:13:19,040 Speaker 6: of taking pretty a pretty measured approach, but there are 298 00:13:19,080 --> 00:13:22,400 Speaker 6: signals that they really are looking to get or to 299 00:13:22,440 --> 00:13:24,880 Speaker 6: scale up their advertising business, and I think sports is 300 00:13:24,880 --> 00:13:26,760 Speaker 6: obviously a big way that they're going to do that. 301 00:13:27,520 --> 00:13:29,920 Speaker 6: You know, you obviously saw that the WWE deal. There 302 00:13:29,960 --> 00:13:31,560 Speaker 6: are a few more things that are out there on 303 00:13:31,559 --> 00:13:34,920 Speaker 6: the horizon, obviously the NBA being a big one, and 304 00:13:35,000 --> 00:13:37,120 Speaker 6: if they if they make an aggressive bid for that, 305 00:13:37,160 --> 00:13:40,200 Speaker 6: then that really tells us how serious they are about advertising. 306 00:13:40,240 --> 00:13:42,000 Speaker 6: And I think potentially what they're what we're looking at 307 00:13:42,040 --> 00:13:44,560 Speaker 6: in terms of advertising dollars, if they get everything right. 308 00:13:45,200 --> 00:13:48,440 Speaker 6: It has been a little bit underwhelming so far, but 309 00:13:48,600 --> 00:13:50,760 Speaker 6: if they you know, if they're able to execute with 310 00:13:51,559 --> 00:13:55,480 Speaker 6: the sports and the other live events expected to be 311 00:13:55,600 --> 00:13:59,160 Speaker 6: at least ten to fifteen percent of their revenue by 312 00:13:59,200 --> 00:14:01,120 Speaker 6: twenty twenty five. So you know, you're looking at a 313 00:14:01,200 --> 00:14:03,840 Speaker 6: forty forty five billion dollar business. I think you're going 314 00:14:03,880 --> 00:14:06,520 Speaker 6: to see four to five billion at least in advertising. 315 00:14:06,640 --> 00:14:09,040 Speaker 2: It is kind of interesting, you know, Githa, We all 316 00:14:09,120 --> 00:14:10,800 Speaker 2: kind of kid. It's like, I only have so many 317 00:14:10,840 --> 00:14:12,800 Speaker 2: hours to watch all this stuff, and so we're picking 318 00:14:12,800 --> 00:14:14,800 Speaker 2: and choosing, and it seems like there's so much out there. 319 00:14:14,840 --> 00:14:17,200 Speaker 2: I mean, the company said in their letter to shareholders, 320 00:14:17,400 --> 00:14:19,920 Speaker 2: with more than two people per household on average, we 321 00:14:19,960 --> 00:14:22,920 Speaker 2: have an audience of over half a billion. And then 322 00:14:22,960 --> 00:14:25,280 Speaker 2: they go on to say no entertainment companies ever programmed 323 00:14:25,280 --> 00:14:27,600 Speaker 2: at this scale and with this ambition before. But it 324 00:14:28,120 --> 00:14:30,560 Speaker 2: does feel like, you know, and listening to you talk about, 325 00:14:30,600 --> 00:14:34,200 Speaker 2: you know, them not reporting their quarterly membership numbers in 326 00:14:34,240 --> 00:14:38,240 Speaker 2: the future, that they are conceding that there is just 327 00:14:38,280 --> 00:14:40,560 Speaker 2: a point that we're going to max out. We can 328 00:14:40,640 --> 00:14:43,400 Speaker 2: just only sign up so many people. And that means 329 00:14:43,400 --> 00:14:45,480 Speaker 2: even on a global scale, right. 330 00:14:46,280 --> 00:14:48,560 Speaker 6: Yes, on a global scale. So back in the day, 331 00:14:48,640 --> 00:14:50,760 Speaker 6: you know, maybe even about three four years ago, they 332 00:14:50,800 --> 00:14:53,520 Speaker 6: would always talk about this one billion number as their 333 00:14:53,840 --> 00:14:57,120 Speaker 6: total addressable market about two years ago. That's when the 334 00:14:57,120 --> 00:14:59,400 Speaker 6: great Netflix reset and the Great Correction happened. 335 00:14:59,520 --> 00:15:00,880 Speaker 5: They kind of toned that down. 336 00:15:00,880 --> 00:15:03,160 Speaker 6: They said, you know, it's probably closer to about four 337 00:15:03,240 --> 00:15:06,360 Speaker 6: hundred five hundred million as the total addressable market looks 338 00:15:06,360 --> 00:15:09,040 Speaker 6: like it's you know, probably even slightly smaller than that. 339 00:15:09,240 --> 00:15:12,920 Speaker 6: You know, so they definitely are conceding that there is 340 00:15:13,000 --> 00:15:15,480 Speaker 6: an upper limit, There is a ceiling to kind of 341 00:15:16,480 --> 00:15:17,200 Speaker 6: the growth here. 342 00:15:17,680 --> 00:15:19,640 Speaker 2: But is there something like I always laugh about this 343 00:15:19,680 --> 00:15:21,920 Speaker 2: sometimes when we talk about some of these big tech names. 344 00:15:21,960 --> 00:15:23,360 Speaker 2: We used to talk about this a lot. By Apple, 345 00:15:23,400 --> 00:15:25,520 Speaker 2: We'd be like, Oh, it's a disappointing number. Yet they 346 00:15:25,560 --> 00:15:27,760 Speaker 2: still sell a lot of stuff, And I understand it's 347 00:15:27,800 --> 00:15:30,600 Speaker 2: growth trends and trajectory. Can we still, though, can see 348 00:15:30,640 --> 00:15:33,240 Speaker 2: that Netflix still is kind of the big behemoth in 349 00:15:33,280 --> 00:15:33,800 Speaker 2: this space. 350 00:15:34,600 --> 00:15:35,480 Speaker 5: They absolutely are. 351 00:15:35,520 --> 00:15:39,320 Speaker 6: They They have completely cemented their dominance when it comes 352 00:15:39,360 --> 00:15:41,120 Speaker 6: to this whole streaming wars. I mean, I think the 353 00:15:41,120 --> 00:15:44,320 Speaker 6: streaming wars are pretty much over. They are the winner, 354 00:15:44,400 --> 00:15:44,880 Speaker 6: there's no. 355 00:15:44,840 --> 00:15:45,480 Speaker 5: Doubt about that. 356 00:15:45,560 --> 00:15:48,080 Speaker 6: And now it's just about them kind of you know, 357 00:15:48,160 --> 00:15:52,320 Speaker 6: getting into different verticals, kind of becoming that you know 358 00:15:52,360 --> 00:15:54,640 Speaker 6: that one service they probably will you know, kind of 359 00:15:54,720 --> 00:15:58,240 Speaker 6: absorb absorb a lot of the other smaller streaming services, 360 00:15:58,280 --> 00:16:01,000 Speaker 6: I think just because they're licensing so much of content 361 00:16:01,080 --> 00:16:04,640 Speaker 6: from them and they you know, it's just but at 362 00:16:04,640 --> 00:16:06,800 Speaker 6: this point, it's definitely going to become you know, how 363 00:16:06,880 --> 00:16:09,440 Speaker 6: much pricing power do they have? So right now we 364 00:16:09,480 --> 00:16:11,400 Speaker 6: are at about fifteen and a half dollars for a 365 00:16:11,400 --> 00:16:15,120 Speaker 6: standard plan in the US. How much upside is there? 366 00:16:15,200 --> 00:16:17,840 Speaker 6: Can that go to twenty twenty five dollars? That is 367 00:16:17,920 --> 00:16:18,880 Speaker 6: kind of the big question. 368 00:16:19,280 --> 00:16:21,640 Speaker 3: So it's funny as you're saying this, I'm thinking to myself, Okay, well, 369 00:16:21,680 --> 00:16:23,760 Speaker 3: you know, twenty years ago, all we wanted was it 370 00:16:23,840 --> 00:16:25,680 Speaker 3: all the card options for TV, and we kind of 371 00:16:25,680 --> 00:16:27,160 Speaker 3: got that now. And I think a lot of us 372 00:16:27,160 --> 00:16:29,400 Speaker 3: are spending more on all a combination of all these 373 00:16:29,440 --> 00:16:32,360 Speaker 3: services given that you know, it's Paramount, it's Hulu, It's Max, 374 00:16:32,400 --> 00:16:34,880 Speaker 3: it's Disney Plus, it's Netflix, just to name a few. 375 00:16:35,920 --> 00:16:38,640 Speaker 3: I do wonder, Githa, where the growth is for Netflix 376 00:16:38,680 --> 00:16:40,480 Speaker 3: at this point. Is it is it in the ad 377 00:16:40,480 --> 00:16:44,040 Speaker 3: supported model, is it outside of the United States? Where 378 00:16:44,200 --> 00:16:46,480 Speaker 3: where is that growth coming from? As the company matures? 379 00:16:47,080 --> 00:16:48,120 Speaker 3: Is it raising prices? 380 00:16:49,000 --> 00:16:52,280 Speaker 6: Yeah, it's actually Jim, it's all of the above, and 381 00:16:52,320 --> 00:16:53,840 Speaker 6: it's just you know, it's going to be a very 382 00:16:54,320 --> 00:16:56,760 Speaker 6: it's a very tough balancing act for them because they 383 00:16:56,760 --> 00:16:59,000 Speaker 6: don't want to do anything too quickly and too rashly, 384 00:16:59,320 --> 00:17:01,440 Speaker 6: which is why when they were kind of implementing their 385 00:17:01,440 --> 00:17:04,159 Speaker 6: whole password sharing crackdown, they were very careful not to 386 00:17:04,280 --> 00:17:07,159 Speaker 6: raise prices because you know, they didn't want to anger 387 00:17:07,520 --> 00:17:10,520 Speaker 6: you know, existing customers. So again, it's going to be 388 00:17:10,800 --> 00:17:12,560 Speaker 6: it's going to be tricky. They're kind of walking a 389 00:17:12,640 --> 00:17:15,600 Speaker 6: tight trope here, but yeah, they are going to use 390 00:17:15,680 --> 00:17:17,840 Speaker 6: all the different levers that they have to kind of 391 00:17:18,560 --> 00:17:21,919 Speaker 6: keep profitability, which is their main metric right now, profitability 392 00:17:21,920 --> 00:17:23,920 Speaker 6: and margins kind of climbing up. 393 00:17:24,760 --> 00:17:27,520 Speaker 1: Githa. Before the report and the analyst I was speaking 394 00:17:27,520 --> 00:17:29,720 Speaker 1: to a lot of them made a big deal about 395 00:17:29,760 --> 00:17:33,520 Speaker 1: the T Mobile partnership that they were working on. How 396 00:17:33,560 --> 00:17:35,760 Speaker 1: do you see that factoring into the future. Do you 397 00:17:35,840 --> 00:17:38,439 Speaker 1: think that that has been a successful program and do 398 00:17:38,200 --> 00:17:40,639 Speaker 1: you can you expect to see them maybe do some 399 00:17:40,640 --> 00:17:43,080 Speaker 1: some more types of those partnerships. 400 00:17:44,040 --> 00:17:46,240 Speaker 6: Absolutely, I think that is going to become a critical 401 00:17:47,160 --> 00:17:50,359 Speaker 6: critical factor for Netflix if it really kind of wants 402 00:17:50,400 --> 00:17:52,600 Speaker 6: to grow its subscribers. So what they did with T 403 00:17:52,720 --> 00:17:55,920 Speaker 6: Mobile was kind of they're offering their ad supported plan, 404 00:17:55,960 --> 00:17:58,679 Speaker 6: which is a seven dollars monthly plan to you know, 405 00:17:58,680 --> 00:18:00,760 Speaker 6: select T Mobile members for free, and they're going to 406 00:18:00,760 --> 00:18:03,080 Speaker 6: do a lot more of that. The having a low 407 00:18:03,119 --> 00:18:05,399 Speaker 6: priced plan kind of really gives them a lot of 408 00:18:05,440 --> 00:18:10,040 Speaker 6: flexibility because they can add subscribers. But then again, they're 409 00:18:10,040 --> 00:18:13,399 Speaker 6: not necessarily losing our poop because remember they're the greater 410 00:18:13,520 --> 00:18:16,280 Speaker 6: the subscribers they have, they can always kind of appeal 411 00:18:16,359 --> 00:18:19,680 Speaker 6: to advertise the advertising community, so and kind of makeup 412 00:18:19,960 --> 00:18:23,120 Speaker 6: or offset for any of that ar foo differential from 413 00:18:23,200 --> 00:18:25,560 Speaker 6: from their advertising dollars. So I think that's going to definitely, 414 00:18:25,840 --> 00:18:28,440 Speaker 6: uh play a much bigger role, not just in the US, 415 00:18:28,440 --> 00:18:30,080 Speaker 6: but of course across the world as well. They're going 416 00:18:30,119 --> 00:18:32,320 Speaker 6: to have lots of those kinds of telecom partnerships. 417 00:18:32,400 --> 00:18:34,560 Speaker 2: Keetha, what do we you know, kind of pull from 418 00:18:34,560 --> 00:18:37,440 Speaker 2: this when it means to like Disney Streaming and Warner 419 00:18:37,480 --> 00:18:39,840 Speaker 2: Brothers Discovery and some of the other services that are 420 00:18:39,880 --> 00:18:40,280 Speaker 2: out there. 421 00:18:41,359 --> 00:18:44,000 Speaker 6: So for all of those other services, I think subscriber 422 00:18:44,040 --> 00:18:46,439 Speaker 6: growth is not the primary focus anymore. 423 00:18:46,480 --> 00:18:48,160 Speaker 5: It's kind of moved now. 424 00:18:48,320 --> 00:18:52,720 Speaker 6: Carol to profitability, where obviously, again Netflix leads the back. 425 00:18:53,480 --> 00:18:57,520 Speaker 6: A lot of these other services have made good progress, 426 00:18:57,520 --> 00:18:59,439 Speaker 6: I would say really good progress when it comes to 427 00:19:00,480 --> 00:19:03,040 Speaker 6: at least they're not profitable yet, but they're you know, 428 00:19:03,240 --> 00:19:05,840 Speaker 6: moderating their losses. Disney obviously is the big one to 429 00:19:05,880 --> 00:19:08,440 Speaker 6: watch for there, and now they have the model in place. 430 00:19:08,480 --> 00:19:11,119 Speaker 6: You know, you've seen exactly what Netflix has accomplished. They 431 00:19:11,119 --> 00:19:13,439 Speaker 6: all know exactly what they have to do. It's just 432 00:19:13,520 --> 00:19:15,760 Speaker 6: going to be a question of how well they do 433 00:19:15,840 --> 00:19:17,440 Speaker 6: it and can they get there quick enough. 434 00:19:17,960 --> 00:19:20,840 Speaker 3: Githa, do you think there's any consumer confusion? I mean, okay, 435 00:19:20,840 --> 00:19:22,280 Speaker 3: I know the answer to this is yes, and I 436 00:19:22,359 --> 00:19:24,080 Speaker 3: just don't know how to solve it. The consumer confusion 437 00:19:24,080 --> 00:19:26,840 Speaker 3: about where to watch something. Yeah, I mentioned Sex and 438 00:19:26,920 --> 00:19:28,199 Speaker 3: the City and I was shocked to hear that that's 439 00:19:28,240 --> 00:19:31,639 Speaker 3: on Netflix. It's an HBO show. Somebody in our simulcast 440 00:19:31,720 --> 00:19:33,600 Speaker 3: chat mentioned in the office, Well, I think that's now 441 00:19:33,600 --> 00:19:36,760 Speaker 3: on Peacock, but it was on Netflix. Friends, a former 442 00:19:36,880 --> 00:19:39,320 Speaker 3: NBC show or No Seinfeld is now on Netflix. I 443 00:19:39,359 --> 00:19:42,720 Speaker 3: believe it's confusing, is that right? I don't know, like 444 00:19:43,200 --> 00:19:43,840 Speaker 3: you know it is. 445 00:19:44,520 --> 00:19:47,440 Speaker 6: How Discovery is the biggest's not content anymore. It's really 446 00:19:47,480 --> 00:19:50,119 Speaker 6: just discovery is the biggest problem right now in the 447 00:19:50,119 --> 00:19:53,040 Speaker 6: whole of you know, the streaming space. And at the 448 00:19:53,119 --> 00:19:54,960 Speaker 6: end of the day, we're kind of looking for that 449 00:19:55,080 --> 00:20:00,000 Speaker 6: one or what we're waiting for is that one aggregator 450 00:20:00,160 --> 00:20:03,240 Speaker 6: or reaggregator that can kind of take all the shows 451 00:20:03,240 --> 00:20:04,719 Speaker 6: that you really want to watch and do it. 452 00:20:04,880 --> 00:20:06,040 Speaker 5: I don't know who it's going to be. Is it 453 00:20:06,080 --> 00:20:07,399 Speaker 5: going to be YouTube? Maybe it is. 454 00:20:07,760 --> 00:20:09,520 Speaker 6: It could be Amazon, it could be Apple, but but 455 00:20:09,560 --> 00:20:12,880 Speaker 6: we're all waiting for that. Again, I'm not sure when 456 00:20:12,920 --> 00:20:13,920 Speaker 6: exactly it's going to happen. 457 00:20:14,160 --> 00:20:16,520 Speaker 3: Roku doesn't Okay, Roku does a really good job of that, 458 00:20:16,560 --> 00:20:19,040 Speaker 3: but you've got to have be signed into everything on 459 00:20:19,080 --> 00:20:21,920 Speaker 3: your Roku and plus that means you're only watching on TV. 460 00:20:21,960 --> 00:20:23,800 Speaker 3: You're not watching it on the iPad or on like 461 00:20:23,840 --> 00:20:24,280 Speaker 3: your phone, and. 462 00:20:24,560 --> 00:20:25,840 Speaker 5: It's there's still is friction. 463 00:20:26,040 --> 00:20:27,399 Speaker 3: Yeheah, there is still a lot of friction. 464 00:20:27,520 --> 00:20:31,040 Speaker 2: Final thought, Githa, I'm just thinking of our investor audience 465 00:20:31,359 --> 00:20:33,639 Speaker 2: as we work through this. Netflix share is still down 466 00:20:33,640 --> 00:20:35,040 Speaker 2: about three and a quarter percent here. 467 00:20:37,000 --> 00:20:38,800 Speaker 6: Yeah, So I think the big question is really going 468 00:20:38,880 --> 00:20:41,320 Speaker 6: to be, you know, on the call of you know 469 00:20:41,440 --> 00:20:44,840 Speaker 6: what how many subscribers do or how many you know 470 00:20:44,840 --> 00:20:48,280 Speaker 6: subscribers you think you've captured from the whole password sharing initiative. 471 00:20:48,280 --> 00:20:50,240 Speaker 6: I think the numbers that they're originally identified was one 472 00:20:50,280 --> 00:20:52,960 Speaker 6: hundred million households. I think people will definitely want to 473 00:20:53,000 --> 00:20:57,080 Speaker 6: know what percentage of that has already been kind of captured, 474 00:20:57,520 --> 00:20:59,760 Speaker 6: just given the strong subscriber metrics, and then they'll kind 475 00:20:59,760 --> 00:21:01,919 Speaker 6: of try to figure out how much more runway is 476 00:21:02,000 --> 00:21:03,000 Speaker 6: left Rockstar. 477 00:21:03,040 --> 00:21:05,200 Speaker 2: As always, Githa Ringing Athen thank you so much. Tech 478 00:21:05,240 --> 00:21:07,800 Speaker 2: and media analyst a Bloomberg Intelligence Red Brown, final thoughts 479 00:21:07,840 --> 00:21:09,600 Speaker 2: for you just twenty seconds here. I mean stocks down 480 00:21:09,600 --> 00:21:11,600 Speaker 2: in the aftermarket, but we'll see what happens tomorrow. 481 00:21:11,680 --> 00:21:14,520 Speaker 1: Yeah, we'll see what happens tomorrow. And for the remainder 482 00:21:14,520 --> 00:21:15,760 Speaker 1: of the year. I think, you know, they put up 483 00:21:15,760 --> 00:21:18,399 Speaker 1: strong financials and that could easily bounce back. You know, 484 00:21:18,440 --> 00:21:21,360 Speaker 1: this quick reaction, but the investors love the short term. 485 00:21:21,440 --> 00:21:22,879 Speaker 3: It depends on what they say. 486 00:21:22,760 --> 00:21:25,080 Speaker 2: On the call exactly, and it'll be interesting to do 487 00:21:25,240 --> 00:21:27,080 Speaker 2: if some investors may say, well, wait, it's a little 488 00:21:27,080 --> 00:21:30,040 Speaker 2: bit cheaper than it was and I want the exposure. 489 00:21:30,080 --> 00:21:32,720 Speaker 2: Red Brown, thank you so Also a rock Star, Yes, yes, 490 00:21:33,960 --> 00:21:34,879 Speaker 2: rock Crease here right now. 491 00:21:34,920 --> 00:21:35,960 Speaker 3: Yeah, we had a great group.