Jason Calacanis CNBC Squawk Alley 7/19/16: Netflix down, PokemonGo Nintendo stock x2, NBA on Twitter

TL;DR

Netflix's second quarter sales were up, but new customer sign-ups fell short of estimates, causing the stock price to drop.

Transcript

joining us from out west today angel investor Jason Calacanis and here at post nine Evernote founder Phil Libin guys good to see you both good morning our top story this morning shares of Netflix are getting crushed down about fourteen percent earlier today second quarter sales were up thirty-one percent but the good news really stopped bear only a... Read More

Key Insights

• 🗞️ Netflix's second quarter sales increased by 31%, but new customer sign-ups in the US fell short of estimates.
• 💦 International growth also missed expectations, resulting in a drop in Netflix's stock price.
• ✋ Higher pricing is generating more revenue for Netflix, but some customers are not renewing their subscriptions.
• 🍉 Quality content, such as "Stranger Things," is crucial for Netflix's long-term success.
• 😤 Competitors like Amazon and Apple may enter the streaming market, but Netflix's management team's experience and focus on building an archive of content gives them an edge.
• 👲 Nintendo's success with "Pokemon Go" has boosted their market cap by nearly doubling it, making them more valuable than Sony.

Questions & Answers

Q: Why did Netflix's stock price drop?

Netflix's stock price dropped because the number of new customer sign-ups in the US was lower than expected, and international growth also missed expectations.

Q: Is Netflix facing any challenges regarding pricing?

Yes, Netflix is facing headwinds on the pricing front. They are removing some customers who are being grandfathered, resulting in fewer renewals. However, the higher pricing is generating more revenue for the company.

Q: What impact does quality content have on Netflix's business?

Quality content is crucial for Netflix's long-term success. Shows like "Stranger Things" have received positive reviews and contribute to the company's growth. If Netflix continues to produce amazing content, the business has the potential to be very successful.

Q: Would it be better for Netflix to have more users at a lower price or fewer users who are willing to pay more?

Netflix aims to have a sustainable business that can grow over time. While having more users at a lower price can increase reach, the company wants loyal users who come for their original content. This transition is essential for long-term success.

Summary & Key Takeaways

• Netflix's second quarter sales increased by 31%.

• However, the number of new customers signing up for the service in the US fell short of estimates.

• International growth also missed expectations, and the third quarter guidance was below expectations.