I smell another secondary offering coming. Where are they getting the cash to pay Dreamworks and Disney ? even the deal doesn't start until 2016, I'm sure that they need to put a deposit of several millions in to hold their place.
$350M/year. I cannot believe that number even though I am daytrading this as a short, with PUTs.
$350M/year payment to Disney could put NFLX 6 ft under if things are managed badly by NFLX mgmt. That could put a nail in the coffin faster than you can say Booyah.......but thats just my opinion!
How does a co., pay another co. $350M per year with a $7.99 subscription fee that if they raise could lose/anger and/or frustrate millions of customers in a heartbeat overnight???? angry customer with pitchforks going for cancel subscription button on one hand, and a payment of 350M due the same day is not a scenario NFLX wants. But what choice does NFLX have???
You realize that they need add over 3 million paying subscribers a year just to make this deal alone earnings neutral? Given that the growth rate in subs is slowing already, I can't imagine it being much more than 3 million a year by 2016.