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All right thank you very much Nicole.
-- orange is the new black.
But is also the new green -- latest original show creating a lot of buzz.
But -- -- lure new subscribers and further boosted Netflix shares we're joined by Chesapeake capital IQ senior analyst -- up Moby and Albert -- director -- Richard solo to get the skinny.
I'll Wear Netflix goes right for here thanks for being with a gentleman.
And you know you could not be more divided -- you have price target of this stock for 225 dollars and rich.
You have a price target of eighty dollars to help.
Make the bullish case for -- Short -- I think row you've seen and it's not gotten a -- -- our target price I'm -- that the address of a market for Netflix is just about a third.
Maybe hit -- in half by the way thorough.
-- there's a huge offset potential not -- nationally as well.
The company has been able to eat a lot of concern about content spending so what you have right now he's subscriber and revenue growth growing faster and content spending.
And I -- that that continues to happen you gonna see sustainable margin expansion.
And -- I think they'd if you think back two years ago rights and make such a long time that did talk about these brand recovery and who would have thought that this is gonna make such a comeback in OK we years.
All right rich you know lot of -- on no orange new black but it doesn't necessarily lift revenues and subscribers at the Netflix.
Yeah it's exactly right right so.
Netflix is gonna spend roughly 400 million dollars on regional content.
And so they have to have an incremental home inflow of subscribers.
Of -- -- 34 million subscribers above what they organically get about one point two quarter.
And where it's make this'll work so far in the fourth quarter of 2012.
In the first quarter of 2013.
It's worked out.
But house of cards was a very powerful show.
Russell on demographics.
They've had two failures hemlock grove -- -- are spending about sixty million dollars on those shelves.
Oranges and black.
Looks like a very strong show from acting point of view will find an audience will find -- mainstream audience.
Looks to me like a little bit like a -- show it's gonna get very high.
Reviews like rectified on Sundance Channel.
-- it may not -- the big audience that they need.
Right grant but it took a what do you say as Netflix against the fancy itself more than HBO and it does more more gambles on more and more original shows.
It's overall batting average have to fall right I mean they they didn't do so well with the -- -- development today.
But -- I think I disagree.
-- -- comment that the over the among Grumman and that would become aware actually failures I think if you look at you have to look at Netflix is our regional strategy.
You know holy sickly I think it's still early relatively speaking and you could argue that -- is actually didn't off negates much stronger than expected.
They've talked about you know ratcheting up to potentially up to twenty shores in the last two to three years.
And I they continue to go for more more exclusivity I think you're gonna see are originals you know play a bigger role in terms -- subscriber -- Position and retention so if anything I would actually say original strategy right now is is trend in much better -- expect that our original and I love it.
-- go -- OK so here's where -- is wrong.
Okay the company hasn't given us any numbers what the actual viewership of any of these shows really and it's so they could say -- their expectations but maybe their expectations are set too well.
And maybe I would say -- -- my expectations too.
If I spent 400 million dollars on something so -- so what investors need to know is this thing -- 200 dollars a share.
I will remind tune up.
That the company earned four dollars and eleven cents in 2011.
And it's on track to earn between a dollar and two dollars in 2013.
-- half wore the evaluation is expanded.
Based on the publicity of the shelves of -- and that's gonna really help -- -- it's not -- but hasn't worked well yes.
Probably -- -- frustration to keep in mind where actually forecast about 43 million about in the DC a Walt Weiss Tribune subscriber gore growth.
I'd get an up to 53 million but it up and up next here financial Scruggs was a -- money.
Pick up what that did the key is that they're going to be able to kind of use the profits from the dvd -- -- continue to reinvest and they very much articulated strategy to be measured in international expansion.
So I think you have to keep in mind here that this is a relatively -- and business model -- what they've been able to demonstrate is that they go to continue.
You know to be a major player -- -- to -- -- the first mover advantage I think they have not relinquish that yet.
So I think that as much as I agreed that there's some -- objection of some of the gains to -- in the valuation but I think really -- would.
Not be Barry said.
-- -- get -- technology first mover advantage is not also not necessarily the best advantage or -- we look at it.
Rim vs apple.
We look at a a well.
Our first mover advantage does not necessarily buy you stock profits over a five to ten appeared OK I -- the equity and -- all right guys -- bracket both to it we gotta go so far though that let's look awfully good this year and so far too has been right.
And -- been wrong.
And what we have another vertical bringing guys back maybe discuss it thanks so much -- realist to know Moby and Richard hello good job.
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