Dialogue. Netflix Investment Update and Why Renting Isn't Throwing Money Away

**SPEAKER_2** (0:06)
Oh, welcome to The Synopsis, a business and investing podcast. Today, I'm joined by Drew Cohen, and we have another installment of our dialogue series. Last time we left off, we did not quite get to Netflix because Drew and I were arguing about something I don't even remember at this point, but we're on to Netflix now. And we're also gonna talk a little housing, which I think you did a really great video. It's a question I often get asked when people, you know, kind of, oh, you're in finance, you're in account. What do you think about rentals and buying? And the question is definitely a little more complicated than people thought. So I think it was a great deep dive you did there. But where do you want to start? Drew, Netflix or housing? What are you feeling over there?

**Drew Cohen** (0:48)
Let's start a little Netflix.

**SPEAKER_2** (0:50)
Let's start a little Netflix. And Netflix has been one that I really don't understand what's happening in a negative sense. I just feel like it's a pretty simple narrative to me. I'm trying to understand why the negativity has been growing around them. It feels like they won the streaming wars. They're the go-to platform. Everyone buys Netflix. You find your 20 bucks a month because that's the one you keep. And all these other ancillary ones are more kind of the... If you got some extra budget, you go buy Paramount Plus, but you keep Netflix, right?

**Drew Cohen** (1:20)
This is why I think it's great having a host who's not on Twitter at all and who isn't in that news stream, because that's probably like the right way to think about this, which is what's really changed in the past couple months. Now, if you are someone that's on Twitter like me, unfortunately, you get fed a narrative from a lot of people. And the narrative as of late is that they have been trying to acquire different businesses, including Time Warner. Then when that failed, they tried to acquire Lionsgate. When that failed, they tried to acquire Roku. And this desire for acquisitions is driven by the fact that they feel they have an inferior position in streaming, and they're very self-conscious about it, and they need to improve their positioning or something like that. And so every not only attempt, but failure to acquire a business is just further entrenching the fact that they are not a leading winner in the stream wars. I think the narrative is something like that.

**SPEAKER_2** (2:16)
Narrative is the dumbest narrative. Okay, you're a content acquisition and creation machine. You can either create content or you can acquire it. And if they feel that there's a good deal to acquire content, they might not shoot your shot and acquire it. And if not, no big deal will create it. It doesn't seem like that off-brand to try to acquire stuff. Doesn't make me feel like management's lost their shirt on that.

**Drew Cohen** (2:36)
I have nothing to add. I mean, that's exactly right. I really don't have another viewpoint, nor do I want to defend kind of what the narrative is around that.

**SPEAKER_2** (2:45)
Well, I'll defend it.

**Drew Cohen** (2:46)
Okay, go ahead. We're switching roles here. Go ahead.

**SPEAKER_2** (2:50)
I'll say, oh my God, Netflix knows that they put out a thousand shows and 999 of them are complete duds and one of them makes it. And they're not confident that they can retain eyeballs and they don't have the same hit making ability as HBO Max or some of these other streamers, perhaps, I guess, or they just don't have, I mean, it just doesn't feel right, like that they don't have confidence. They hit make so many hits. Yeah, they spend a lot of money, but they've got, I mean, every year there's a must-see Netflix show, I feel like every year.

**Drew Cohen** (3:19)
You give up defending that viewpoint pretty quickly.

**SPEAKER_2** (3:21)
I just felt stupid as I was saying it.
I couldn't quite get all the way through it. It just doesn't make a lot of sense. I mean, I don't know. I also maybe over-index anecdotally, but I think at this point, Netflix is one subscription, and I'm not a big TV watcher, but I won't cancel that. I'm always gonna have it, and then yeah, maybe someone comes up to me and goes, oh, you gotta watch Landman. They've got Cowboys and Oil, and you gotta check it out. And I go, all right, maybe I'll subscribe to Paramount Plus for like a month. But then after I'm done watching Landman, I'm canceling, I'm churning, I'm out.

**Drew Cohen** (3:52)