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Netflix’s Success Only Makes It Burn More Cash

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Netflix (NASDAQ:NFLX) isn’t shy about discussing how much cash it burns. It’s been free cash flow negative for a few years now, and management wrote, “[W]e expect to be FCF negative for many years” in its second-quarter letter to shareholders. In a recent interview at the Goldman Sachs Communicopia Conference, CFO David Wells reiterated that statement. He added that the more successful Netflix is, the longer it plans to burn cash.

Netflix’s ongoing cash burn means it will continue to pile up debt. And it’s paying a premium on that debt, since it’s already carrying a relatively high debt-to-EBITDA ratio. Considering Netflix doesn’t plan to increase EBITDA anytime in the near future, it’s going to continue racking up interest expenses to fund its growth.

Original content is to blame
Wells said the company could produce positive free cash flow, or at least be close to it, if it licensed its original programming instead of financing it. Indeed, before Netflix dove headlong into original content, it occasionally produced positive free cash flow. Even its quarters of cash burn were relatively modest — $50 million here, $20 million there. Now it’s burning $2 billion to $2.5 billion per year.

But Wells says there are a couple of major advantages to producing content in-house despite the fact that it costs the company more upfront. First, it allows for better long-term economics by removing the profits of the production company. That may be why Netflix claims originals are some of its most efficient content spend. Second, Netflix obtains better control over the content and intellectual property rights, allowing it to distribute the productions globally.

So even with Netflix’s high interest rates on its bond issues, it might be saving money in the long run by financing productions itself and removing the middleman.

Spending won’t slow down until user growth does
Wells told the audience at Communicopia, “The faster we grow, the more we’re going to reinvest in content.” And that only makes sense. Netflix’s originals are perhaps the biggest driving factor behind its subscriber growth. As the company expands globally, producing originals in-house is the most efficient way to secure global rights.

Right now, the incremental cost of adding another subscriber is less than the previous one, as Wells put it. Netflix is still benefiting from increased scale as subscriber growth outpaces content spend. The company had its biggest second quarter this year, adding 5.2 million global subscribers.

Eventually that won’t be the case anymore. If Netflix wants to reach another subscriber it’ll have to invest more than it’s worth in content. But management believes it still has a long way to go before it reaches that point. It maintains the addressable market in the U.S. is 60 million to 90 million subscribers. It currently has 50 million. Globally, the opportunity is even bigger, and Netflix has yet to surpass the subscriber count of the U.S. in its international markets.

Raising debt and burning cash
Netflix says it will continue tapping the debt market to fund the capital needs of its original productions. Despite its poor ratings from credit agencies, Wells says he’s fine with the company’s position. Management isn’t going to sacrifice the company’s growth to get its bonds to investment grade, he said.

The important thing for investors to remember, though, is that Netflix is completely in control of how much it spends on content. If the growth isn’t there, it’s not going to spend more. Even with a bunch of new content buyers in the market, Wells says it won’t impact the company’s budget. Netflix will just produce fewer shows if it has to.

That said, he likened the content market to the professional athlete market. Top-notch performers are seeing bigger and bigger contracts, but replacement-level players might see their average salary go down. If anyone is capable of finding diamonds in the rough, it’s Netflix and its troves of data.

Better buys than Netflix are out there
Two renowned investors think the 10 stocks on this exclusive list are better buys than Netflix — and they have a track record that can’t be ignored.

Source: https://www.fool.com/investing/2017/09/19/netflixs-success-only-makes-it-burn-more-cash.aspx

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Spider-Man: Into the Spider-Verse: the movie’s 2 post-credits scenes, explained

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This post contains spoilers for Spider-Man: Into the Spider-Verse. Do not read any further if you don’t want to be spoiled!

Spider-Man: Into the Spider-Verse, Sony’s animated Spider-Man feature film, has two post-credits scenes. The first is a tribute to Stan Lee, the co-creator of Spider-Man who died in November, and a thank-you to Lee’s Spider-Man co-creator, Steve Ditko. The second is a jokey callback to the dimension-jumping aspect of the movie.

Over the past several years, mid- and post-credits scenes have become a superhero movie tradition. Though Marvel is most famous for them, they’re something that fans look forward to every time a major movie studio — Marvel, Fox, Sony, Warner Bros. — puts out a superhero-centric release. Sometimes, they contain huge reveals that hint at future films (see: Thanos intercepting Thor’s Asgardian spaceship at the end of Thor: Ragnarok, which nodded toward Avengers: Infinity War).

But with Spider-Man: Into the Spider-Verse, things are a little different. The movie isn’t currently connected to Sony’s Spider-Man and Venom superhero properties or cinematic universe (though Sony could certainly change this in the future). So its two post-credits scenes are a bit more specific to the movie and to the history of Spider-Man than usual.

1) The first scene is a tribute to Stan Lee and Steve Ditko
The first Into the Spider-Verse credits scene is actually more of a title card. It contains a quote from Stan Lee, the co-creator of Spider-Man who died on November 12 after a long and legendary career in the comics industry.

“That person who helps others simply because it should or must be done, and because it is the right thing to do, is indeed, without a doubt, a real superhero,” the quote reads.

The meaning of the quote — which comes from an interview Lee once gave about heroism — is self-explanatory. But in light of his death, it’s a touching reminder of how this man who was responsible for changing so many people’s lives saw goodness in the world. The scene ends with a thank-you addressed to both Lee and his Spider-Man co-creator Steve Ditko.

2) The second scene introduces us to Oscar Isaac’s Spider-Man 2099
The main plot of Spider-Man: Into the Spider-Verse is about the existence of multiple universes that are parallel to the one the movie is primarily set in, but which all differ from one another to varying degrees.

For example, in Miles Morales’s universe, Morales gets bitten by a special spider that somehow gives him powers, and then watches Peter Parker, a.k.a., Spider-Man die — a shift from what happens in Spider-Gwen’s universe, where she gets bitten by a distinctly radioactive spider, ends up with powers, and then watches Peter Parker die. The differences are primarily in who gets to be a Spider-Person and how their powers came to be.

But one thing remains constant throughout every universe the film reveals: There are heroic spider-people in each one, hence the title of Spider-Man: Into the Spider-Verse. And in the second credits scene, we are introduced to another version of Spider-Man who didn’t appear in the movie.

After an introductory caption that reads, “Meanwhile, in Nueva York…” we see a woman explaining the dimension-jumping events of the movie we just watched to a mysterious figure. The figure is ultimately revealed to be a character from the Spider-Man comic books known as Miguel O’Hara, a.k.a. Spider-Man 2099. Voiced here by Oscar Isaac (Star Wars), Miguel is an established spider-person who has had adventures in the 2D world of comic books, but not in any of Spider-Man’s cinematic, live-action adaptations.

Miguel reveals that he’s going on his own dimension-jumping adventure to “the beginning”; it’s then we learn that Miguel means the 1967 Spider-Man animated TV series, specifically an episode called “Double Identity,” the origin of the “Spider-Man pointing at Spider-Man” meme:
We see Miguel insert himself into the scene, and hijinks ensue. It’s a playful nod to Spider-Man’s pop culture dominance and a clever, self-aware joke that pays off for an audience that is familiar with the history of Spider-Man and Miguel, while also appealing to anyone who’s seen the meme or who might laugh at two Spider-Men fighting over which of them is the real Spider-Man.

Isaac is a well-known actor, and while his presence as the voice of Miguel could indicate that Sony has bigger plans for the character, nothing has been announced yet. With that said, perhaps Miguel will join the rest of the Spider-Gang for the Into the Spider-Verse sequel that’s already in development.

Source: https://www.vox.com/culture/2018/12/13/18138006/spider-man-into-the-spider-verse-end-credits-scenes-explained

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Nancy Wilson, Grammy-winning jazz singer, dies at 81

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Nancy Wilson, the Grammy-winning “song stylist” and torch singer whose polished pop-jazz vocals made her a platinum artist and top concert performer, has died.

Wilson, who retired from touring in 2011, died after a long illness at her home in Pioneertown, a California desert community near Joshua Tree National Park, her manager and publicist Devra Hall Levy told The Associated Press late Thursday night. She was 81.

Influenced by Dinah Washington, Nat “King” Cole and other stars, Wilson covered everything from jazz standards to “Little Green Apples” and in the 1960s alone released eight albums that reached the top 20 on Billboard’s pop charts. Sometimes elegant and understated, or quick and conversational and a little naughty, she was best known for such songs as her breakthrough “Guess Who I Saw Today” and the 1964 hit ”(You Don’t Know) How Glad I Am,” which drew upon Broadway, pop and jazz.

She resisted being identified with a single category, especially jazz, and referred to herself as a “song stylist.”

“The music that I sing today was the pop music of the 1960s,” she told The San Francisco Chronicle in 2010. “I just never considered myself a jazz singer. I do not do runs and — you know. I take a lyric and make it mine. I consider myself an interpreter of the lyric.”

Wilson’s dozens of albums included a celebrated collaboration with Cannonball Adderley, “Nancy Wilson/Cannonball Adderley,” a small group setting which understandably could be called jazz; “Broadway — My Way”; “Lush Life”; and “The Nancy Wilson Show!” a best-selling concert recording. “How Glad I Am” brought her a Grammy in 1965 for best R&B performance, and she later won Grammys for best jazz vocal album in 2005 for the intimate “R.S.V.P (Rare Songs, Very Personal)” and in 2007 for “Turned to Blue,” a showcase for the relaxed, confident swing she mastered later in life. The National Endowment for the Arts awarded her a “Jazz Masters Fellowship” in 2004 for lifetime achievement.

Wilson also had a busy career on television, film and radio, her credits including “Hawaii Five-O,” ″Police Story,” the Robert Townshend spoof “Meteor Man” and years hosting NPR’s “Jazz Profiles” series. Active in the civil rights movement, including the Selma march of 1965, she received an NAACP Image Award in 1998.

Wilson was married twice — to drummer Kenny Dennis, whom she divorced in 1970; and to Wiley Burton, who died in 2008. She had three children.

Born in Chillicothe, Ohio, the eldest of six children of an iron foundry worker and a maid, Wilson sang in church as a girl and by age 4 had decided on her profession. She was in high school when she won a talent contest sponsored by a local TV station and was given her own program. After briefly attending Central State College, she toured Ohio with the Rusty Bryant’s Carolyn Club Big Band and met such jazz artists as Adderley, who encouraged her to move to New York.

She soon had a regular gig at The Blue Morocco, and got in touch with Adderley’s manager, John Levy.
“He set up a session to record a demo,” Wilson later observed during an interview for the Los Angeles Philharmonic. “Ray Bryant and I went in and recorded ‘Guess Who I Saw Today,’ ‘Sometimes I’m Happy,’ and two other songs. We sent them to Capitol and within five days the phone rang. Within six weeks I had all the things I wanted.”

Her first album, “Like in Love!”, came out in 1959, and she had her greatest commercial success over the following decade despite contending at times with the latest sounds. Gamely, she covered Beatles songs (“And I Love Her” became “And I Love Him”), Stevie Wonder’s “Uptight (Everything’s Alright)” and “Son of a Preacher Man,” on which she strained to mimic Aretha Franklin’s fiery gospel style. She was so outside the contemporary music scene an interviewer once stumped her by asking about Cream, the million-selling rock trio featuring Eric Clapton.

“It took me years to know what that question was about. Remember, I was constantly working or I was traveling to perform. The ’60s for me were about work,” she told JazzWax in 2010.

In the 1970s and after, she continued to record regularly and perform worldwide, at home in nightclubs, concert halls and open-air settings, singing at jazz festivals from Newport to Tokyo. She officially stopped touring with a show at Ohio University in September 2011, but had been thinking of stepping back for years. When she turned 70, in 2007, she was guest of honor at a Carnegie Hall gala. The show ended with Wilson performing such favorites as “Never, Never Will I Marry,” ″I Can’t Make You Love Me” and the Gershwin classic “How Long Has This Been Going On?”

“After 55 years of doing what I do professionally, I have a right to ask how long? I’m trying to retire, people,” she said with a laugh before leaving the stage to a standing ovation.

In accordance with Wilson’s wishes, there will be no funeral service, a family statement said. A celebration of her life will be held most likely in February, the month of her birth.

She is survived by her son, Kacy Dennis; daughters Samantha Burton and Sheryl Burton; sisters Karen Davis and Brenda Vann and five grandchildren.

Source: https://www.usatoday.com/story/life/music/2018/12/13/nancy-wilson-grammy-winning-jazz-singer-dies-81/2308468002/

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Miss USA Under Fire for Mocking Miss Cambodia and Miss Vietnam During Miss Universe Competition

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Sarah Rose Summers, Miss USA 2018, apologized via her Instagram account on Thursday after a video went viral of her making controversial comments about Nat Rern, Miss Cambodia and H’Hen Nie, Miss Vietnam for not speaking English during the Miss Universe competition.

Summers was called out online for mocking the two other contestants on Instagram Live; of Miss Vietnam, she commented: “She’s so cute and she pretends to know so much English and then you ask her a question after having a whole conversation with her and she goes…” before going on to mime nodding and smiling. Of Rern, she said, “Poor Cambodia” while talking about her not speaking English.

The backlash was swift, and included the popular Instagram account Diet Prada.
In her caption, Summers said that she had spoken about the issue with both Rern and Nie and apologized for her comments.

“@MissUniverse is an opportunity for women from around the world to learn about each other’s cultures, life experiences, and views. We all come from different backgrounds and can grow alongside one another,” Summers wrote. “In a moment where I intended to admire the courage of a few of my sisters, I said something that I now realize can be perceived as not respectful, and I apologize. My life, friendships, and career revolve around me being a compassionate and empathetic woman. I would never intend to hurt another. I am grateful for opportunities to speak with Nat, Miss Cambodia, and H’Hen, Miss Vietnam, directly about this experience. These are the moments that matter most to me.”

The Miss Universe pageant airs on Dec. 16 from Thailand.

Source: http://time.com/5479470/miss-usa-backlash/

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