Compared with House of Cards, compelling viewing this was not.
Netflix (NFLX) dipped its toe into the experimental waters of streaming a quarterly earnings call live online, with investors’ questions posed by one analyst and a financial journalist. The 30-minute chat session streamed Monday on YouTube (GOOG) was notable for the college dorm-like quality of the video production, complete with laptop cameras, bad lighting, and two guys in goatees.
Netflix Chief Executive Reed Hastings (a longtime goatee aficionado, as is his chief financial officer, David Wells) said he chose the “fireside chat format” because it was the most dynamic and interesting option his team had seen at investor conferences. “This is our attempt to bring that value to the broad online public,” he said. Chief Content Officer Ted Sarandos plugged into the chat from Beverly Hills; one of the company’s Emmy awards sat on a desk behind him, a not-so-subtle reminder of Netflix’s 14 Emmy nominations last week.
The chat wasn’t exactly Emmy-caliber, though. It played like a couple of reporters parrying with executives who weren’t persuaded to give up details for a story. There’s a reason real-world newsrooms don’t stream their activities on the Internet—watching an interviewee find new ways to say “no comment” gets tedious fast. It’s a format interesting to only the hardiest of journalism students.
The first question from CNBC reporter Julia Boorstin set the tone. She asked Hastings to respond to criticism that such a format undercuts analysts looking to communicate with company executives, as they typically do on open conference calls. (Not incidentally, the questions were compiled via e-mails and tweets to Boorstin and BTIG Research analyst Rich Greenfield.) “Well, I think we should process that after the interview and see if it’s productive and useful for investors, and see what they think,” Hastings said.
From there, Greenfield jumped to the big question: why Netflix missed its target for U.S. subscriber growth in the second quarter, a miss that led to a 7 percent drop in after-market trading Monday evening. Hastings said the company was pleased with its progress and saw no reason for any alarm. His anodyne answer illustrated one of the format’s prime shortcomings: With follow-ups only from Greenfield and Boorstin, Hastings didn’t have to address different perspectives or related queries from other analysts. That was great news for him, but it meant the production did little to help investors or equity analysts.
That’s one reason Yahoo’s (YHOO) July 16 earnings video with CEO Marissa Mayer was more useful: Analysts had their typical Q&A phone session after Mayer and Yahoo CFO Ken Goldman got to sit anchor-style at a traditional TV news desk and show PowerPoint slides and video for a half-hour. Yahoo got to show off its studio-quality, high-def video capabilities without cutting off analyst access.
Still, it’s worth wondering what the point is in adding video to an exchange perfectly suited for the phone. “Maybe the CFO will pick his nose” was one possible answer from, of all places, a Yahoo columnist. But if Hastings intends to continue the streamed chat next quarter, Netflix should rent a proper studio. And please ring Spacey, an executive producer of House of Cards: A consult is in order.