Netflix Stock Can Still Go Higher in 2014: Mahaney

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Dec. 30 (Bloomberg) –- RBC Capital Markets Analyst Mark Mahaney discusses why Netflix was one of the top performing stocks of 2013 and if they can continue the ride in 2014 with Erik Schatzker and Scarlet Fu on Bloomberg Television’s “Market Makers.” Mahaney owns no stock in Netflix. (Source: Bloomberg)

Extraordinary year of 300%, metals can keep running?

-- netflix can keep running?

There is still skepticism and short interests.

We think about 3 or 4 pending catalysts.

This has not improved in profitability and any international markets except canada.

We think it will and it will be positive for the stock.

There is skepticism that they can do more oh it -- were original content.

If they can do that, that is positive.

Finally, if they can continue to lower churn on the core property, which they are doing because of original content.

That will cause the stock to move higher.

You mentioned a comparison to hbo.

There is focus on how dimensio -- how domestic subscribers of netflix surpassed hbo.

Netflix has a very different business models on hbo.

Netflix has exclusive rights for the first two years for original series.

After that, if it wants to keep showing that, it has to pay.

That puts at risk, does not?

-- doesn't it?


There is competitive risk.

Hbo and amazon.

Can they manage the content costs?

This company is spending $3 billion a year, that is going to continue to rise.

If they continue to add subs, 5 million to 7 million paid subscribers, there is not a content acquisition cost problem.

If they do not, there is a problem.

We have never had a subscription service with 40 million subscribers worldwide like netflix has today.

We think that goes to 60 million over the next three years to four years.

If we are wrong, we are wrong on the stock.

If content acquisition costs becomes a challenge for netflix, the company will presumably want to pass that onto the customers by raising prices.

If amazon represents the biggest threat to netflix, is not going to be impossible?

Jeff bezos has proven he does not care about margins.

I may disagree with you on that.

I think jeff bezos cares about margins.

I think we will see a recovery and thus.

There is a free competitor.

What we know through survey work is that satisfaction and netflix continues to rise.

Netflix is still at one of the best values in america, the best deal in america after the happy meal.

You get unlimited content and you are not paying per view.

I will argue that point aggressively.

I think netflix has pricing power.

That is the final catalyst we will see in the next two years.

If netflix shows it can get more than a dollars per month, -- more than eight dollars per month, stock is higher.

If it has pricing power, where would it be?

There have been suggestions netflix might offer a family package where children's programming is additional rather than raising prices across the board.

I agree with one of your points.

I don't think there will be a naked increase.

I don't think we will wake up and see that it has gone to $8.99. there is an ability to tear pricing -- to tier pricing.

There are different content packages, different axis packages they can offer to people.

What we found in survey work was that 7% of u.s. subs have signed up for the $11.99 a month plan where you can get three people or four people streaming.

Good for kids in college, they can use that netflix account.

You are finding more people signing up for that.

That is the implicit pricing power netflix has.

Mark, we are grateful to you for taking time to share your thoughts.

Analyst at rbc capital markets.

He thinks netflix can continue running to $440 from $360. taking into your genetics has never been easier.

The ceo who is staking his claim on getting consumers access to their dna.

Drone the drone -- the drone business is taking off.

The lawyer who is taking on the

This text has been automatically generated. It may not be 100% accurate.


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