Comments on: Wedbush Morgan’s Michael Pachter – Sell Netflix, Buy Blockbuster

By: How Netflix Killed Blockbuster « Real-World Lessons from an Internet Entrepreneur

Mon, 28 Dec 2009 16:11:39 +0000

[...] came out with their own rent-by-mail service and it appeared that Netflix could be in trouble. Many analysts started signing Netflix’s death sentence, saying that Netflix wouldn’t be able to compete [...]

By: Anonymous

Anonymous — Fri, 05 Oct 2007 19:35:00 +0000

Gonna correct a few things here...

"Blockbuster edits their movies."

No, that would be WalMart. Blockbuster carries more Unedited and Unrated versions of top movies than any other retailer.

"Blockbuster has a more limited selection (including no NC-17 movies, last I checked)"

Blockbuster has the same # of titles as Netflix. We also have more Unrated versions than they do.

"Many stores are franchises!"

More like 1 in 100 stores are a franchise store. Sorry. Incorrect again.

"The whole point is to provide these DVD's in the mail. So, as I read it, Pachter thinks they will somehow benefit from these bricks and mortar locations fulfilling online orders from their limited invetories??? Yeah, right. Not the stores I've been to."

The stores do not fill the online orders. Warehouses do. The instore exchanges are to give customers something to watch while they wait for their next online rentals to arrive.

Nice try though.

By: Anonymous

Anonymous — Sun, 28 Aug 2005 21:26:00 +0000

Pachter and his buddy Herb Greenberg don’t have much to say these days. NFLX is up over 100%. If you have shorted it expecting it to reach Mr. Pachter’s price targe of $3, you would be in a world of pain.

This guy has zero credibility along with Herb Greenberg (who is being sued by Overstock for shady dealings with hedge funds who short stocks and then ask him to print negative news).

By: Anonymous

Anonymous — Thu, 19 May 2005 06:21:00 +0000

Is Michael Patcher still around ? Does he change the $3 target for NFLX, or does he see things others cannot?

By: Anonymous

Anonymous — Thu, 05 May 2005 11:31:00 +0000

Cost to Aquire New Customer.
Yes thats the KEY.
the word is that by year
end Blockbuster will have
spent 400$ million to gather
up 2 million subscribers Q1 06
even thou they tapped into
their own active customer
base of 20 million.
aron?

By: boris

boris — Thu, 05 May 2005 11:28:00 +0000

the word is that Blockbuster
will have spent 400$ million
to gather 2 million customers
by Q1 of 2006. and may not
get their money back.

By: Anonymous

Anonymous — Wed, 04 May 2005 08:05:00 +0000

This is all meaningless unless there are some hard metrics from BBI to compare and contrast what each is spending to acquire customers. This is the part of the equation that will ultimately determine who is winning or will win the marketshare. There are rumors that BBI has a SAC charge of over $50 but there are also questions regarding NFLX’s containment of SAC spending. at the very least we know what NFLX spends on it…we do not know what BBI spends. BBI seems to be able to operate in a world where acountability is not something the financial community holds them to. They have too much debt and have the daunting task of trying to catch up to the first mover in the sector. Add the recent grandstanding by Icahn and Antioco and what you have is a recipe for taking the eye off the ball and further eroding a shrinking marketshare. BTW, equally as dumb is the call for the dividend payment by Icahn. He chides BBI for overspending but let’s take on more expense so Mr. Coroporate Raider can show a profit on his stock…..

By: Anonymous

Anonymous — Mon, 02 May 2005 20:04:00 +0000

Michael Pachter has called the fall of netflix better than anyone else I know. Congrats to those analysts who are bold enough to be truthful and who are not held by the brokerage firms to tout falling stocks.

By: Anonymous

Anonymous — Mon, 02 May 2005 07:27:00 +0000

Pachter sounds a lot like that analyst Ravi Suria who in 2000 said that Amazon will run out of money and will go bankrupt:

http://www.newyorker.com/talk/content/?020520ta_talk_surowiecki

Last I checked, Amazon is still around, and Suria who?

The funny thing is, if NFLX were to turnaround and post a profit, Pachter will try to take credit for that as well.

He has interest in BBI and he wants NFLX to fail so he and his friends can make money, hence all the FUD.

By: Aron

Aron — Mon, 02 May 2005 07:07:00 +0000

The cash concern for Netflix seems overdone. They shed 5% of their cash reserve this last quarter, but they are forecasting to be cash positive again this quarter and for the rest of the year.

I would most like to see Pachter's justification for the 4$ (or 5$) cost advantage. That's an enormous figure. Broken out, Netflix spends about 7$ on content per customer per month. Can Blockbuster really do it for 2$ or 3$? It blows the mind.

Stores face a postage challenge as well. I don't think stores will do enough mailings to get the maximum bulk\preprocessing discounts. This is especially relevent to the return path (using BRM)

It also seems very natural to me that Blockbuster's proposed hybrid fulfillment system may introduce challenging quality control issues. Namely, multitasking store employees failing to perform consistently. Conversely, the pure shipping center approach is an oiled quota-driven machine.