Netflix’s Consumer Price Hike and Netflix’s Stock Price Value – Entertainment During a Deflationary Economy – January 22, 2022,
Netflix will raise prices as expected and what comes to mind when people think of price hikes, is what happened to cable television, but I remind people, that Netflix is often commercial-free, as a Netflix subscriber myself who also watches YouTube, the Advertisements on YouTube are getting increasingly annoying, but even worse than those annoying YouTube Advertisements are advertisements I’ll see on television.
I don’t have cable, but I do have friends who do have cable and I have to say I really hate commercials, they’re so time-consuming, I also like the ability to speed up a video I’m watching, something I can do on both Youtube and Netflix, I can’t do that on cable television, I don’t even like watching sports on television anymore, a football game maybe or championship game in any sport might pique my interest, but otherwise, I’ve grown to hate cable TV, and if not for some great content creators, I’m beginning to find YouTube annoying also.
I’d say YouTube is becoming more vulnerable to competition also, it might not seem like it now, because they’re so dominant but politics destroyed cable and politics is also destroying modern social media, which leaves the door wide open for quality content creation. Does Netflix represent quality? Well, I own Netflix Stock, but not enough Stock to make me care, when it dropped in price in 2022, I barely noticed, I bought in early by the way and my strategy is simple, I like free stocks, my current Netflix stocks were free. So even if it drops to zero I don’t really care at this point.
But I do think Netflix is overvalued, why? Because the world is too politically biased at the moment and people can’t catch a break from Hollywood, which I hear is increasingly more dominated by the Chinese Communist Party, meaning that there’s going to be a lot of junk on streaming platforms that want to appease certain political narratives.
During a deflationary cycle, humans tend to hate politics, people want to escape from central control, they want to feel free to experience thoughts outside of the normal paradigm and once misery amongst humans starts hitting record highs which is what happens during deflationary cycles, something unique must present itself to the world and I suspect based on the evolving human experience, that Hollywood will be on the wrong side of history this time.
Humans are getting a lot smarter, not only are we getting smarter, we’re becoming more decentralized in the process meaning that if your business model omits certain ways of thinking from its platform during a deflationary cycle you could be missing out on an organic social movement that might catch all of us off guard. I think Netflix has to raise its price because it’s not profitable, but the problem with raising its prices is that although we’re headed into a consumer price inflation environment, the economy is DELFATING.
It’s costing consumers more money to purchase fewer goods and services, now, I point to austerity measures as being inevitable at this point, but I accept that I could be wrong. Some assume that printing more money or government spending will solve this problem, but this is a regulatory problem, we have an overbearing political class. Have humans become consciously aware of it yet? I’m not sure, but when government gets too big, humans tend to react and human reaction to Big Government tends to benefit the entertainment industry.
Where I currently see problems with Netflix is that it’s not taking risks with its programming, it’s rather bland, doing everything on the safe side, which works but is that worthy of stock price appreciation during a deflationary economy? I don’t think so. People want an escape and Netflix is providing an escape, but a safe one, it will need to send shockwaves to stand out and justify its consumer price hikes as well as its stock price valuations.
Because as an example, more people might start sharing Netflix accounts to save money, this will happen as other companies attempt to steal market share, thereby making Netflix vulnerable to competitive forces in a deflationary economy. Amazon Prime is angling itself to be the beneficiary of a collapsing Netflix, if the price of Netflix gets too low, to be surprised if they get bought out.
When it comes to entertainment, I tend to look at comedy, people forget that Joe Rogan one of the most influential people in the world today is a comedian. Another comedian Dave Chappelle is very influential, the political types have been seeking to destroy everything humans find entertaining and these overbearing parent types are in for a rude awakening once the tide turns and people stop playing nice.
Even under the most oppressive circumstances, humans will seek out freedom and this is where Netflix would be wise to capitalize, I question however if it can capitalize? Because if it has to cater to popular political views it alienates large swaths of people and then binds itself to compete for a smaller market share. Once people stop subscribing Netflix will find either in the position to be bought out or bankrupt. When I was younger I couldn’t imagine Blockbuster going bust and then it did.
Interesting times ahead!