We have collected Google Trends search data for Netflix Originals up to the week ended 17th February 2018 and inputted it into our updated regression model to determine the current net subscriber additions and guide towards the quarter’s expected additions. Our model suggests Netflix would have added 4.34 million subscribers in the first half of the quarter. The current track suggests it is on pace to meet and slightly beat the company’s guidance of 6.3 million subscribers for the quarter. We are estimating net subscriber additions to be 6.6 million in Q1 2018. About our Regression Model – Our forecast […]
Google Trend Netflix Originals to Forecast Subscribers
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We have updated our Netflix Q4 net subscriber additions to account for all original programming released up to December 30, 2017. Based on Google Trends historical search data of every Netflix Original relative to its most popular show, 13 Reasons Why, we now estimate that Netflix will add 8.1 million subscribers in Q4 2017 vs. management’s guidance of 6.3 million net subscriber additions. This will be the third straight quarter Netflix will beat its guidance, putting net subscriber additions for the end of 2017 at 23.6 million, up 24% from the end of Q4 2016. The following recaps the foundation of our proprietary multiple linear regression […]
We have updated our net subscriber addition regression model based on Q3 results. Our forecast model now has an adjusted r-squared of 0.99 for tracking net subscriber additions using 18 degrees of freedom. We have applied this model to Q4 programming using data for the week ended November 25, 2017. Based primarily on the performance of it’s original content, we believe Netflix will add anywhere between 7.7 million to 8.2 million subscribers in Q4. This estimate is up from our estimate of 7.4 million net additions at the end of Q3 and would be a strong beat against management’s guidance of 6.4 million net adds. The findings […]
We have updated our Netlfix Q3 net subscriber additions to account for end of month demand. Using Google Trends historical search data of every Netflix Original relative to its most popular show of all-time, 13 Reasons Why, we now estimate Netflix will add 5.15 million subscribers in Q3 2017 versus our previous estimate of 5.3 million subscribers. Prior to the T-Mobile announcement partnership announcement we had expected Q3 Netflix net subscriber additions to be 4 million, short of its Q3 guidance of 4.4 million net subscriber additions. The following recaps the foundation of our proprietary multiple linear regression forecast model: Systematically categorizing and […]
Recall we track net subscriber adds by tracking the content available while taking into account seasonality and internet penetration rates. These were all statistically significant factors in forecasting net subscriber additions. Prior to the T-Mobile deal, we found that Q3 net subscriber additions were on pace to miss Q3 estimates. We estimated 4M vs. NTFX guide of 4.4M. Post the T-Mobile deal, we expect Q3 net subscriber additions will exceed Q3 estimates. We estimate 5.34 vs. NTFX guide of 4.4M. We forecast that 2.9M T-Mobile Family Plans will be added to NFLX from T-Mobile alone and a few hundred thousand coming […]
On September 6th just after 11 a.m, T-Mobile (TMUS:NYSE) posted on their blog that they will begin offering T-Mobile ONE family accounts a free standard Netflix subscription. The offer begins tomorrow (September 12th). No end date to this offer was provided. These plans typically cost $9.99 per month. Post the announcement, Netflix’s stock closed at $179.25, 2.3% above its opening price. Netflix Made this Move Because they were on Pace to Miss Q3 Guidance – According to our forecast model, Q3 2017 was pacing towards missing Q3 net subscriber addition guidance. Recall Ozark did not gain material traction despite Netflix’s […]
A volatile few months – The first half of Q3 2017 has been volatile for Netflix’s (NFLX:NASDAQ) stock price. Starting in July with our initiation at $146, NFLX jumped to $189 following a stronger than expected Q2 net subscriber additions before settling around $168 today. Also driven by news of Disney, Facebook and Apple entering the over-the-top (OTT) content market, Q3’s annualized volatility of 46% compares to a 29.5% annual volatility that Netflix has seen year-to-date. Netflix might fall short of the guided 4.4 million net adds – After updating our regression model for Q2 data, we estimate that a […]
Facts: On Tuesday, August 8th after the market close, Disney (DIS-NYSE) announced on their fiscal Q3 conference call that: ► They will end their distribution agreement with Netflix (NFLX-NASDAQ) for subscription streaming of new releases from Disney and Pixar, beginning with the 2019 calendar-year theatrical slate ►The biggest named productions set for release in 2019 include a live-action Lion King, Frozen 2, and Toy Story 4 ►Disney is still undecided on whether to pull Lucasfilm (Star Wars) and Marvel (DareDevil and more) content ► Netflix did not have global rights to our Disney movies. They bought opportunistically in certain markets. The original deal, which […]
Nice beat – Netflix is up 13% since reporting Q2 results and its Q3 outlook Monday night. The price is up primarily due to reporting net subscriber additions that were materially higher than their guidance. Traditional Financial metrics were inline – The income statement was generally inline with our estimates and market consensus. Q2 Sales were $2.79 billion (beat our estimates by less than 1%, but was up 32% Y/Y), operating margin was 4.6% (vs. 3.3% last year and 9.7% last quarter due in large part to the shift of House of Card’s costs to Q2). Diluted EPS of $0.15 was inline with estimates. Free […]
This is the first in an ongoing series of research pieces examining Netflix’s (NFLX-NASDAQ) business and share price. Unlike their programming, there will be no end date to our research unless the company is acquired. We view Netflix revenue and content costs similar to the way the company does, taking into account U.S. and International churn, customer lifetime value and customer acquisition costs. In order to help answer some key questions, we surveyed over 600 hundred people in the U.S. and Mexico, with a goal of helping to answer questions we had surrounding market penetration, pricing, content, competition and subscriber […]