Netflix (NFLX) Earnings Videocast Draws More Criticism
"I'm not going to submit my questions in advance to a competitor or member of the press and let them screen them to determine whether they should be aired," Pachter said in an interview. "I know this is Reed being progressive and trying to trail-blaze, but I think this is going to stifle the conversation instead of making it more dynamic."
Pachter isn't the only analyst raising concerns. Rich Tullo of Albert Fried & Co took the matter one step further today. Instead of submitting questions to Hasting, Tullo is submitting open questions.
"A conference call is not a press conference or a TV PR interview to be controlled and managed," jabbed Tullo. "We refuse to submit questions to any competitor, or to a TV personality for review. While as a courtesy, we have forwarded general questions to be considered by management; we think submitting questions to directly support a PR campaign is revealing proprietary information to non executives and too selective. Thus we submit open questions publicly and to the media."
Tullos questions are as below:
Questions for Reed Hastings:
* does NFLX have a succession plan in place and will the board of directors hire an outside CEO or will the Company promote from within? Should we assume Ted Sarandos will be the next CEO of NFLX today?
*In addition to content offering how does NFLX compete on next generation Cloud TV platforms which will stream live channels as well as Free VOD and SVOD content?
* Management has said that multiple users of NFLX accounts are in the 800k range. Our surveys of millennial generation users suggest sharing could be greater than company supplied views. Is sharing a friction point in content deals, and how will NFLX protect licensee IP better, after all if Wal-Mart had 2% of its customers shoplifting we think they would do something about that. On a related topic what is the price elasticity of the $7.99 plan if at least 800K users refuse to pay? What makes management think NFLX can raise or maintain pricing and still grow subscribers?
* If NFLX is a content network today, we think a good comparison is affiliate fee networks of broadly distributed linear content networks. If networks distributed to 80 to 100 million homes get $0.08 to $5.00 per month, based on content offering, what makes NFLX think it can get to $90 million subscribers at $7.99?
* Why is NFLX not the AOL, Motorola Razor Phone, or Blackberry Service of this iteration of technology change and do you see next generation TV as changing the game like AP stores did? In an environment where rights distribution (linear, SVOD, and VOD) are converging onto aggregation platforms like an XBOX or a TIVO what is the benefit of exclusive streaming rights as NFLX Disney content shares the same distribution aggregator as Disney's own channels?
Questions David Wells:
*If Turbo does poorly in the box office are there any levers in your $140 Deal with Dream Works (DWA NC) to acquire the content at better rates? Do NFLX shareholders need to pay $2 per share for franchise flops. Is content quality control one of the risks in your turnaround strategy? If the strategy is to get to 90 million subs are your standards too forgiving or do NFLX subs love anything?
Albert Fried & Company Underweight Netflix with a price target of $80.00
For an analyst ratings summary and ratings history on Netflix (NASDAQ: NFLX) click here. For more ratings news on Netflix click here.
Shares of Netflix closed at $243.82 yesterday, with a 52 week range of $52.81-$248.85.