Netflix Reported Q3 Earnings: 10 Things You Should Know

Yesterday, Netflix held their Q3 quarterly earnings call.  Here are the Top 10 things you should know:

1. Over $2B in Streaming Revenue: For the first time they crossed over the $2B mark in quarterly streaming revenue.  Domestic streaming was $1.3B, an 8% increase from the previous quarter and up 23% YoY.  International streaming revenue of $.853B was 40% of the total, and 13% higher from Q2 and an impressive 65% growth YoY.

netflix-streaming-rev-q2-2016

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Even Though The Accountant was #1 at B.O, WB Accountants May Still See Red

Ben Affleck’s The Accountant was the number one movie at the US box office this past weekend.  It brought in $24.7MM on a budget of only $44MM.  The WB, who distributed the title, should be ecstatic, right?  Well, similar to our analysis on Star Trek and Ghostbusters, let’s take a closer look and see:

Rank Title US Box Office Weekend (MM)
1 The Accountant  $24.7
2 Kevin Hart: What Now?  $12.0
3 The Girl on the Train  $12.0
4 Miss Peregrine’s Home for Peculiar Children  $8.9
5 Deepwater Horizon  $6.4
Source: BoxOfficeMojo

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Earnings Calendar for Top Entertainment/Tech/Telecom Companies

Starting next week, through the second week of November will be the quarterly earnings conference calls for the major entertainment, tech and telecom companies.  The chart below has the complete schedule.  As usual, Netflix will kick things off first, with their Monday 5PM ET call.

Showbiz Brief will have a write up after each call.

Company DOW Date  Time
Netflix Mon Oct 17 5:00pm ET
Verizon Thu Oct 20 8:30am ET
AT&T Tue Oct 25 4:30pm ET
Apple Tue Oct 25 5:00pm ET
Comcast Wed Oct 26 8:30am ET
Amazon Thu Oct 27 5:30pm ET
Alphabet Thu Oct 27 4:30pm ET
Twitter Thu Oct 27 5:00pm ET
Regal Entertainment Thu Oct 27 4:30pm ET
Discovery Tue Nov 01 8:30am ET
Sony Corp Tue Nov 01 4:15am ET
Frontier Communications Tue Nov 01 4:30pm ET
Time Warner Wed Nov 02 8:30am ET
21st Century Fox Wed Nov 02 4:00pm ET
Facebook Wed Nov 02 5:00pm ET
Charter Thu Nov 03 10:00am ET
CBS Thu Nov 03 4:30pm ET
Lionsgate Thu Nov 03 5:00pm ET
AMC Networks Thu Nov 03 11:00am ET
Scripps Networks Mon Nov 07 11:00am ET
Viacom Wed Nov 09 8:30am ET
Disney Thu Nov 10 5:00pm ET
Altice Thu Nov 10 TBD
AMC Entertainment TBD
Cinemark TBD
Dish Network Corp TBD

Who’s Really To Blame For The NFL Ratings Deflation?

The ratings for the NFL, through the first four weeks, are down 11% across all networks. This has created such a panic that the league issued a memo (see bottom of page) to all the teams in response to media inquiries about the decline in ratings.  They are essentially pinning all blame on the presidential election, while patting themselves on the back for how great there are.  That’s like watching a Kitchen Nightmares episode, when Gordon Ramsey spits out a still frozen piece of lasagna in front of a shocked restaurant owner – who thought his food was fantastic.  The NFL needs that same dose of reality.

Here are 5 reasons the NFL is to blame for this seasons’ decline in ratings:

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The Window is Closed: Netflix Signs Deal to Simultaneously Show Their Original Movies In Theaters Same Day on Service

Netflix just signed a 10 picture deal with luxury theater chain iPic Entertainment to screen their original movies in theaters, the same day they premiere on the SVOD service.  What once took a 6-12 month ‘window’ for a theatrical movie to reach home viewing, is now instantaneous.

These movies will play in iPic’s LA and NYC theaters, with a possible wider release to their other 13 locations. Financial terms have not been disclosed, but the usual split between a studio and a US theater chain is 55/45, with 55% of box office receipts going to the studio.

This Friday, The Siege of Jadotville will be the first movie to launch under the deal.

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Shomi the Door. 5 Reasons the Canadian SVOD Service Will Close After 2 Years

Back in August 2014, two of the biggest cable companies in Canada, Rogers Communications and Shaw Communications, launched an SVOD service called Shomi. It was to compete with the SVOD behemoth Netflix.

Well, apparently they lost.  Come November 30th they are shutting down their service. Rogers will take a C$100 million to C$140 million loss ($75 million to $105 million), while Shaw had already written down the service for C$51 million.

That leaves Netflix and BCE Inc’s Crave TV as the last standing large SVOD providers.

What went wrong?  Here are my 5 best guess reasons:

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Customer Satisfaction for ‘Triple Play’ Service Providers Rank the Lowest Among All Industries

According to the American Customer Satisfaction Index (ACSI), Internet Service, Pay TV and Fixed Line Telephone Service providers were the bottom four in customer satisfaction.  If not for the dreaded Health Insurance industry, the infamous ‘Triple Play’ would have won the trifecta in customer dissatisfaction.

The Auto (Lincoln/Ford, Honda, BMW), Full Service Restaurants (Cracker Barrel, Texas Roadhouse, Longhorn Steakhouse) and Cellular (Apple, Samsung, Motorola) industries were the top three.

acsi-2016-across-industries

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Q1 2016 – Sony Earnings Call Summary

Sony

Below are my key takeaways from the Sony Q1 2016 Earnings Call on July 29:

Summary:

Consolidated revenue dropped 11% YoY, operating income was down 42% and net income was off 74%.  The reasons for the bad results were the Kumamoto Earthquake in April, a decrease in demand for image sensors for mobile, a reduction in mid-range smartphone unit sales and negative effects of currency exchange

On the positive side, Uncharted 4 helped Game & Network Services segment rise by 14% and Angry Birds contributed to the Pictures Segment 7% gain with their $347MM global take.

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Q2 2016 – Charter Earnings Call Summary

Charter

Below are my key takeaways from the Charter Q2 2016 Earnings Call on Aug 9:

Summary:

CEO Tom Rutledge’s opening statement: “On May 18th we closed our transaction with Time Warner Cable and Bright House Networks creating a new company with a bigger and a significantly more concentrated footprint giving us the local and national scale to innovate and grow faster.  Our high capacity network now reaches nearly 49MM homes and business and we have over 25MM residential and business customers in attractive markets.”

Bought Time Warner Cable and Bright House Networks for approximately $67,000MM. The new company will have over 25MM customers in 41 states and be marketed under the Charter Spectrum brand name.  They will be the second-largest U.S. broadband provider and third-largest video provider.

Total Q2 revenue for the new company was $9,988MM, a 6.6% YoY increase.  Here’s a breakdown by segment:

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