Matthew Ball+ Your Authors @ballmatthew Venture investor, strategist, essayist, that guy on Twitter. Prev. Head of Strategy @AmazonStudios, ex-Otter Media, @MediaREDEF. 🇨🇦 Oct. 16, 2018 1 min read + Your Authors

[Qtr later]
1/ Whether Netflix is 1MM up or down on estimates isn't particularly interesting
2/ The question is: are they (now) more or less likely to achieve the scale and dominance they're pursuing/financially need/assumed by its share price. 1MM here or there tells you nothing

3/ Furthermore, Netflix's gambit is really more about relative gains - is anyone really closing the gap on Netflix's aggregate users x usage lead? Or just in theory going to start, soon, probably... then uh oh
4/ Again, minor misses/beats don't matter here

5/ Note that Netflix's past seven years of annual sub growth: 41%, 33%, 29%, 30%, 25%, 25%, 26% (proj). From 30MM to FYE 140MM. Denominator size hasn't really compressed growth. This story is so much more consequential. Even if 2018 fell to 20%, how much does core story change?

6/ Of course, its problematic if the company can't predict its growth, concerning if they company thinks its growing more than it does, etc.

But the big picture - the arc of growth - is separate. Every 10 or 15 or 20% swing on increasingly small miss or beat is insane.

7/ In 2Q, when Netflix "missed" by 1MM after a history of 1MM, 1MM, 2MM, 1MM, etc. beats - it still *grew* by 16% of HBO's annual revenue. In a single quarter
8/ And yes I re-bought last week

You can follow @ballmatthew.


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