Peter Kafka

Recent Posts by Peter Kafka

Just How Much Damage Did Netflix Really Do to Itself?

How bad was Q3 for Netflix? By Wall Street’s reckoning, an unmitigated disaster: Three months ago, when the company reported its Q2 numbers, its stock was at $281. Now it’s at $117, down 58 percent.

But now we’ll get Reed Hastings’s own report card, when Netflix announces its quarterly earnings this afternoon.

As Citigroup’s Mark Mahaney notes, the key numbers to look for aren’t the Q3 metrics — the company has already preannounced that its subscriber numbers are going to be lower than it initially thought — but its guidance for the rest of the year.

That’s where we’ll be able to see the impact of its many stumbles — the price hike, the broken Starz deal, Qwikster’s New Coke moment — or at least what Netflix thinks the impact will be. If Netflix subscribers are really bailing out — and not just threatening to do so on Hastings’s Facebook page — you should be able to see that reflected in its expectations for the next three months.

Remember that shortly after Netflix dropped its first bomb this summer — a 60 percent price hike for many of its customers — management predicted that it would suffer a subscriber blip in Q3, but would recover by Q4. Let’s see if they’ve hung on to that confidence.

Here are Mahaney’s best guesses for Netflix’s Q3 results and Q4 guidance, along with Wall Street’s estimates (click image to enlarge). I’ll be covering the results live at 4 pm ET.


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The problem with the Billionaire Savior phase of the newspaper collapse has always been that billionaires don’t tend to like the kind of authority-questioning journalism that upsets the status quo.

— Ryan Chittum, writing in the Columbia Journalism Review about the promise of Pierre Omidyar’s new media venture with Glenn Greenwald