All right, well, we're going to one of our top stories. It's Netflix. It is growing again and as a result, perhaps Hollywood can breathe sigh of relief for can it joining us now to discuss the earnings. Is that geta wrong? And Nathan Bloom Big Intelligence, techn media and less so thanks so for joining us, give us an overview first
of all of what the Netflix said. Yeah, absolutely, and thank you so much for having me so that you know, this was the first quarter where we kind of saw this reversal of of that subscriber slowdown, if you will. So they returned to subscriber growth. That's a huge positive. Um. You know, there's always been this concern about after they came out with those really weak numbers uh in the first half, whether this was kind of the beginning of the end for the streaming story, and it looks like
it's not. They still have some growth levels left, uh. And we not only saw that with the three Q numbers, but we also saw a pretty encouraging four Q guidance kind of coming slightly above consensus. And remember that they haven't really factored in any of the upside that they potentially could get from that new advertising tier. That they're about to debut. So I think there's a lot of
optimism that's built into this report. Yeah, it was interesting that they mentioned that that wasn't really tied to that, so that may be coming. So obviously a lot to like here. I wanted to bring up one possible negative and I know you'll address it well. Um, some naysayers say that this plan by Netflix to stop giving the subscriber numbers it doesn't look good. I mean, normally, if you've got great numbers, you like to to spread them
out there. I know that there are Apple references that you know, they stopped giving numbers on the sale of individual iPhones and that didn't really hurt. But still some people will will look askance at this. Yeah, you know, I think it is an admission, uh in some ways that this is no longer a subscriber story. I mean, this was for for the past fifteen years. It has completely just driven off of that one metric, right, subscriber numbers.
But now we've reached a point in the model where it's really kind of uh saturated it if you will, it's it's going to be somewhat of a low growth model.
And so there has been kind of this recalibration across the streaming industry not to have too much of this hyper focus on subscribers and and instead move to the metrics that really matter, which are the financial metrics, because at the end of the day, you could have millions of subscribers, but you could be still losing money, which is exactly what we've seen with so many of these
streaming stories. And so this is kind of an uh you know again, an admission that we have to kind of move to those profitability metrics, to to more of the financial metrics, to more of the end game end unit economics. And so, yes, there there is going to be a lot of volatility in their subscriber numbers, and they kind of want to avoid that drama quadrant and
quarter out. I guess I want to look at the other side of all this, if you will, you look at the amount of the landscape for Netflix, and there's a huge amount of competition now with the HBO, obviously, Disney Plus and a variety of others. Is it to be the owner of the platform or is it better to be somebody who's making uh content and selling it into the various contents As a company like Sony for instance.
That's a great question. Uh, you know, there's always been this big debate about you know, is it better to be the content owner, is it better to be the distributor. It's good to be both if you can, which is
exactly what Netflix has become. Right. They were originally this just this distributor of you know, second run content, right, just old TV shows, old movies, and then they finally made that big switch into making their own original content and now they're one of the biggest content producers in the world. So ideally you do need to have a great distribution mechanism, which they have kind of built. But at the end of the day, it is content that kind of feeds that beast. So it's good to have both,
but I still give the edge to content. And they're really tapping into I mean, we look at these big numbers in Asia, they're tapping into non English language shows. Extraordinary Attorney Woo was one. It's a favorite in our household, but there's so many other ones, and they seem to be connecting with with these production houses in a lot
of different countries. Oh. Absolutely, And as you pointed out, there are so many titles local language titles that are resonating so well, not just in those markets, but across the globe. I mean A Squid Game was the greatest example of this last year, and as you just brought up, you know, the the other Korean title this quarter as well, and we're seeing them invest more and more in those
local language titles. Remember that not only helps them kind of diversify their genre, diversify their uh, you know, title, their slate, but it's also much lower cost to produce a lot of these these titles compared to you know, some of the English speaking content. So all in all, I think it's it's a great win win. When it comes to advertising, though, they're going to be presumably taking on the same sort of pool of resources or money
on ad spend for linear television surely. Yeah, they are looking to kind of get to to kind of tap into that whole linear television market in the In the US this is about you know, a sixty sixty five billion dollar market. Globally it's about a two billion dollar market. So they are banking on the fact that as those eyeballs kind of move away from TV, you know, more and more people are going to spend money on on Digital at Platforms Guita, thanks so much for joining us.
Excellent insights as usual Gita rung Enough and Bloomberg Intelligence, tech and media analyst