Everyone makes mistakes. But this one, flagged in an SEC filing this morning, is notable because it’s so big and so important for investors who want to know whether the streaming video company is biting off more than it can chew financially as it expands overseas. Netflix says it corrected “a typographical error” that led it to report last week that its recently launched services in Latin America and the UK and Ireland “have contributed to a 14% increase in our content expenses in the International segment.” That claim appeared twice in the quarterly report. Both now have been changed to 348%. It’s a sore point, especially after Netflix’s credibility took a hit from its overoptimistic forecast that it would add 7M domestic streaming subscribers in 2012 — which it just reduced to about 5M. Susquehanna Financial Group’s Vasily Karasyov said last week that “it’s fair for investors to wonder” whether Netflix’s hopes for overseas growth “will also prove to be too optimistic.” Janney Capital Markets’ Tony Wible warned investors to watch international costs and Netflix’s “commitment to contain these costs.” And Wedbush Securities’ Michael Pachter said that if “content costs rise faster than we have modeled or growth stall sooner than we have modeled, we are prepared to lower our quite generous $45 price target.”


That’ll leave a mark.
Like all of Deadline’s Netflix coverage, this article is fair and balanced. And by that I mean it’s clearly got an agenda.
I love Netflix, especially due to all of their wonderful indie and foreign films. But I will admit the company is run by complete and total idiots. I just wonder how long my $8/mo streaming is going to last.
Please elaborate, as I’m a Netflix user and new stock holder, so I honestly could use some perspective here, considering the huge error here (which I don’t see reported on TDameritrade, by the way, which seems kind of odd).
I’m sorry, it doesn’t take having an agenda to know that Netflix has really been screwing up. I mean, being off by 334% on your expenses is just staggering incompetence, typo my a$$. I love Netflix as well, but all I can do is just shake my head at the mistakes they keep making.
How does reporting gross negligence and corporate incompetence that is already pretty well publicized somehow an “agenda” of anybody’s?
The blood is in the water. The stuidos won’t give NFLX any good content unless they pay thru the nose. NFLX subscribers are getting frustrated because they have seen everything they want to see on the service and there is nothing new coming on line.
The tv series that NFLX keeps trumpeting about are very expensive and will not drive new subscribers.
NFLX will be out of business or bought by MSFT in the next 18 months.
It’s hard to think of another company that’s imploded like this. Pure incompetence.
NFLX is up over 20% on news of Carl Icahn owning a ~10% stake.