![manage netflix accounts manage netflix accounts](https://www.getdroidtips.com/wp-content/uploads/2020/11/Kick-Somebody-Out-of-your-Netflix-Account-1.png)
This means that its amortisation policy has been getting less conservative.
#MANAGE NETFLIX ACCOUNTS SERIES#
The chart (repeated in larger size below) shows that the life of a Netflix film or series has doubled in the last few years. First, let me summarise for those who find accounting dull.
#MANAGE NETFLIX ACCOUNTS HOW TO#
This is a complex area, and we explain below our approach, using techniques from our online course How to Read a Balance Sheet and our Forensic Accounting training course for professional investors, and justify our conclusion.
![manage netflix accounts manage netflix accounts](https://i.postimg.cc/K81fghw0/Capture.jpg)
In this blog, we look at the way Netflix accounts for content. This was a much less conservative policy, in our view. This allowed Netflix to report a higher level of earnings and also much higher operating cash flow: under this policy, DVD purchases were treated as an investing item and hence did not affect the operating cash metric. Consider the way it used to account for DVDs: Blockbuster treated them as stock, while Netflix (we believe having changed its policy) treated them as fixed assets. We believe that Netflix has been aggressive in its accounting for some time. We pose the question in this article, “Is Netflix Cooking the Books?”. But I have less respect for the company’s accounting and one of its policies is the subject of this blog. I am a Netflix customer and a great admirer of Reed Hastings. I hope that this experience has not coloured my views but I should at least declare the possibility. Making mistakes is part of the investor’s journey, and omissions like this are particularly galling.įorgive me therefore if at times this article sounds a little pained or even prejudiced. I have occasionally made money trading Netflix, but this has been a total failure relative to a buy and hold strategy. It would have been easier and had we held it, far more profitable. The business was eventually sold to deeper pocketed LoveFilm before its purchase by Amazon.įounder and good friend Ben asks me still why didn’t we just buy Netflix stock. Back then, capital raising for early stage tech companies was more difficult.
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I persuaded easyJet founder Stelios, then seeking to expand eas圜inema, to inject additional capital but the deal fell through. Twenty odd years ago, I was a significant junior partner in a UK clone of US DVD rental company, Netflix.