Netflix Lands the Coen Brothers’ Western TV Series
Netflix is such an interesting business.They have far and away the broadest streaming distribution (75% of it!) in the USA (1) which is a market that already 53% saturated.And the bull case guys point to international subscription growth - which is still in its infancy - as the reason to hold Netflix forever. (2)They have much lower infrastructure costs then the previous cable providers without having to build the pipes.But they also don't benefit from the built in government / monopoly protections that came with that investment in the distribution platform.So in terms of long game how do they protect themselves?Own the content.Disney pulling their rug out earlier this week underscores how fucked Netflix is as just a distributor.So if, in the end, distribution becomes the new "dumb pipes" at what point do the content providers pull the judo flip and control the distribution and the margin?Disney again, case in point.So do we underwrite Netflix's future - aka their current 227 PE! - in their ability to execute on the content side?(1) https://techcrunch.com/2017/04/10/netflix-reaches-75-of-u-s-...(2) https://www.cnbc.com/2017/08/08/buy-netflix-because-its-inte...