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Netflix Beat Masks Bigger Problems
Netflix Beat Masks Bigger Problems

Yahoo

time13 hours ago

  • Business
  • Yahoo

Netflix Beat Masks Bigger Problems

Netflix (NASDAQ:NFLX) outperformed Q1 2025 earnings estimates with a 25% surge in earnings per share and near-record levels of operating margins. But under the hood, its free cash flow paints a different picture. Its new shift into advertising, live programming, and gaming could hold long-term potential, but in the near term, it's driving cost increases, squeezing margins, and uncovering weak points in monetization quality. Netflix reported diluted EPS of $6.61, significantly above the $5.68 expectation, with revenue increasing 13% year over year to $10.54 billion. Operating margin was 31.7%, close to all-time best levels, driven by price hikes and stable additions of free cash flow ($2.66 billion) increased at a more subdued clip. A large part of the beat was facilitated by content amortization timing and delayed spending, not cash-driven profit. This differential between accruals and cash has been a chronic trend at Netflix, headline profits leap, but underlying cash dynamics add to the tension. Revenue growth at UCAN slowed to 9% YoY from 15% in Q4 owing to normalization of plan mix and the lack of NFL-related ad spikes. APAC increased by 23%, and LATAM by 8%, but these markets have a correspondingly lower ARPU that constrains contribution to operating income. Content liabilities stand at $21.8 billion, with amortization spiking. Netflix is pre-paying spend into live sports, global content, and unscripted programming, all genres of high variability and uncertain ROI. The vision is obvious, but so too is the cash burn risk building. Source: Shareholder letter Netflix is no longer a subscription business, it's becoming a vertically integrated entertainment platform. The strategy has three pillars: ads, live programming, and interactive content. The new Netflix Ads Suite arrived in April in the U.S. and Canada, with native programmatic capabilities and more sophisticated targeting. Growth into the rest of the EMEA and LATAM regions is in process, aiming to reach double ad revenue by 2025. That said, advertising still contributes a "very small" percentage to income today. The competition is tough: YouTube has scale, Hulu has access to the Disney ecosystem, and Amazon has commerce bundling. The live programming drive is more mature. Netflix's purchase of WWE Monday Night RAW, the impending Taylor versus Serrano rematch, and its NFL Christmas game are driving engagement spikes. Sports streaming is a famously pricey endeavor. Rights are expensive, and payback comes largely from advertising. Netflix's bet is on tentpole moments, not quantity, but that bet has a fixed cost profile. Gaming is still the most speculative area. There are promising titles like Squid Game: Unleashed and Thronglets, but there is minimal monetization and uncertain market fit. The firm has maintained a cautious investment so far, framing it more in the form of optionality than a near-term lever. Source: Shareholder letter Localized content is Netflix's strongest worldwide competitive advantage. Shows like Adolescence (UK) and Counterattack (Mexico) have generated local resonance across over 50 markets. But there are trade-offs that come with international expansion. Reduced pricing, fragmentation of cultures, and increased regulatory restrictions--in Europe and Asia first of allreduce profitability. Netflix is expanding where the margins are thinnest. Netflix's moat, previously framed by scale and ubiquity, is eroding. It now must compete not just with Max and Disney+, but also with YouTube, TikTok, and Amazon Prime, each of which is delivering bundled value or ecosystem benefits. Netflix does not have a second business layer (such as Amazon's retail or Disney's parks), making it that much more subject to content ROI fluctuation. Netflix's valuation today extends far past industry norms and history to market medians, with the market apparently fully factoring in perfect execution. The stock has a P/E of 56.78 and a forward P/E of 47.17, each of which is in the top decile of the industry. Its PEG of 3.57 and price-to-free cash flow of 70.67 are also a reflection of how far-stretched the stock is from its fundamentals. On nearly all forward-looking multiples, EV/EBITDA of 18.88, EV/FCF of 68.64, EV/Revenue of 12.74, Netflix is valued like a capital-expensive media platform instead of a high-margin SaaS business. Its ratio of 2.04 to Price to GF Value suggests that it's trading at over twice its value. The GF Value computed by GuruFocus is $588, whereas Netflix's market cap has been trading around $1,200, which means that it is highly overvalued. Even best-case DCF estimates of $661 and modeled FCF estimates of $739 place the stock 3050% above intrinsic value. At the same time, recent Guru activity is characterized by net selling. Baillie Gifford (Trades, Portfolio) (-9.86%), PRIMECAP, Frank Sands (Trades, Portfolio), Philippe Laffont (Trades, Portfolio), and Ken Fisher (Trades, Portfolio) (-54.45%) are just a few of the notable managers that trimmed holdings through March 31, 2025. While small purchases by Jeremy Grantham (Trades, Portfolio) and Ray Dalio (Trades, Portfolio) were offset by pervasive decreases among institutional owners, the 3-year trend reveals a clear net of selling, even through the stock rose, a possible red flag. Netflix is no longer the sole bidder for the attention economy. It competes now with YouTube for short-form and creator-driven content, TikTok for younger audiences, as well as with Apple and Amazon for bundle benefits. Even within SVOD, Disney+ and Max are consolidating, providing sports, lifestyle, and entertainment bundles that concentrate spending by consumers on fewer platforms. Netflix's greatest challenge is not competition, it's that its foundational advantage of scale of content is being eroded by content fatigue. More is not always better, and not all hits translate. But bundlers like Amazon subsidize with commerce, and Disney has a park and merchandising ecosystem. Netflix doesn't have such adjacent business ecosystems, so it is more vulnerable to a shift in content ROIC. The firm is further confronted by mounting political headwinds. With its viewership spread across more than two-thirds of its customers outside of the U.S., Netflix must now contend with international regulation, content quotas, and increasing digital nationalism. These threats do not necessarily manifest themselves on earnings for several quarters, but could ultimately limit its monetization potential or create regulatory drag on the margin. Source: Nielsen Netflix is implementing an ambitious shift, becoming a complete-stack entertainment company across content, advertising, live, and interactive. But whereas its strategic plan makes sense, its valuation is predicated on execution excellence across all vectors, margin growth, scaling monetization, as well as continued subscriber growth. The vision of future Netflix would actually materialize, but at the current price, the market is already paying for it all. Investors would do well to watch out for monetization conversion from ads as well as live content, margin control through H2 2025, as well as compounding of FCF, as valuation based on beliefs doesn't take surprises generally. This article first appeared on GuruFocus. 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Integrity and quality the key to media success, says FMT chairman
Integrity and quality the key to media success, says FMT chairman

Free Malaysia Today

timea day ago

  • Business
  • Free Malaysia Today

Integrity and quality the key to media success, says FMT chairman

FMT executive chairman Nelson Fernandez says 'technology without content is meaningless'. PETALING JAYA : Media companies should focus on maintaining their integrity and building influence to remain relevant, says FMT executive chairman Nelson Fernandez. Fernandez said this would help companies survive in an industry witnessing stiffer competition and shrinking revenues. Nelson Fernandez ,FMT executive chairman. Media companies faced an uphill battle against the explosive growth of social media platforms, which had taken a lion's share of advertising revenue, he said. They should ensure that their priority remains on producing high quality content. 'We can have all the technology in the world but if you don't get your content right, nobody is going to come and pay attention to you or read you or watch you,' he said at a forum on media and nation-building, held in Cyberjaya on Thursday. Fernandez said that the key to earning the reader's trust lay in being accountable and honest about mistakes made. 'I don't profess to say that FMT does everything right. But if we ever make a mistake, we have no qualms in apologising and admitting that we did it wrong,' he said. 'This whole business of trust is something you earn.' 'We are not in this business to make money because there's not much money to be made. The only currency we have is influence,' he said Fernandez said social media had the power to create overnight sensations. However, 'technology without content is meaningless,' he said. 'We make sure that our content is uniquely Malaysian so that it appeals to our audience.' Khalid Ahmad, former chairman of TV3 and NSTP. Khalid Ahmad, former chairman of TV3 and NSTP, said that media companies should capitalise on the relatively inexpensive media tools to deliver compelling content. He said creativity is needed for a company to stand out in the media landscape. 'In the end, presentation is what matters.' Policy on social media Namanzee Harris, CEO of TV Al Hijrah, urged the government to draft a national policy on social media platforms to ensure local media companies are not held at the mercy of technology companies. Namanzee Harris, CEO of TV Al Hijrah. Namanzee was referring to TikTok's ban on 23 local media accounts in February (later lifted) after they reported on a sexual assault case involving a minor. Namanzee said the incident had exposed the dependence of media companies on social media platforms over which they have no control. 'The idea of needing to go directly to TikTok for answers is deeply concerning. Sustainability in the media sector can only be secured through structured national policy,' Namanzee said, pointing out that countries such as the United States, Indonesia and China were already taking proactive steps.

VPN Not Working on Netflix? 7 Simple Fixes That Work
VPN Not Working on Netflix? 7 Simple Fixes That Work

Gizmodo

time2 days ago

  • Entertainment
  • Gizmodo

VPN Not Working on Netflix? 7 Simple Fixes That Work

Netflix is famous for its region-locked content, which seems to be constantly shifting. One day, you'll find the series you've enjoyed in your library, only for it to be removed the other day. To make matters worse, VPNs not working with Netflix are a typical issue. One that turns an exciting binge-watching afternoon into a scenario of doom and gloom. If Netflix isn't working with a VPN, you're facing several issues. Perhaps a VPN has been detected or you're simply not using a VPN good enough to unblock Netflix content. Whatever the case may be, our experts have come up with a hefty number of useful tips. We'll explain why the problem appears, how to overcome it, and which VPNs to use to reduce the margin of the Netflix proxy error. Your struggle ends today — let us address it together. Netflix Not Working With a VPN: Quick Recap of the Best Solutions In a hurry? Here are our 7 fixes to bypass the Netflix VPN block and access its libraries from anywhere. Use the best VPN for Netflix (we recommend NordVPN). Clear browser cache and cookies. Use a different server. Switch between multiple protocols. Try a dedicated IP address. Disable your IPv6. Seek help from the VPN support team. Use Netflix Problem-free With NordVPN Netflix Not Working With a VPN Explained As a VPN user, you know that Netflix won't work with a VPN occasionally. However, this error manifests in multiple different ways. One of the most common ways is that the streaming service doesn't display the right catalog. Let's say you connect to a server in the United States. This means you have a US IP address. In theory, you should be able to watch Netflix US — right? With a proper choice of provider, it does. However, in some cases, it'll seem like it works, only for the desired movie or series to not appear in the catalog. This still means the VPN isn't working with Netflix. In some cases, people encounter the famous proxy error: 'You seem to be using an unblocker or proxy.' In this case, the VPN is immediately detected, and you know right away that you won't be able to watch anything. Both mechanisms mean that your VPN doesn't work with Netflix. Netflix VPN Not Working: 7 Simple Fixes This isn't the end of the world, however. The streaming service is pretty efficient at blocking VPN-originating IPs. It's also great at detecting proxy service users and shooting them down to prevent access. If your VPN still won't work with Netflix, here are 7 tried and tested fixes to consider: 1. Use a Reputable VPN for Netflix The most effective way to overcome this problem is to use a VPN that actually works. We recommend these three: NordVPN — the best pick for streaming overall; ExpressVPN — a speedy option for Ultra HD streaming; Proton VPN — many dedicated streaming servers. Having tested them many times, we can confirm they work with multiple popular libraries. Moreover, they have servers in 105 to 118 countries, making it pretty simple to alter your Netflix region and unblock content. These providers offer many streaming-friendly features. For instance, all three come with unrestricted bandwidth. This is essential for watching shows and movies in high resolution. An important aspect to consider is speed — all three have 10 Gbps server ports backed by modern protocols such as NordLynx, Lightway Turbo, and WireGuard. Another point goes towards compatibility. They supply VPN clients for all devices and even offer capable browser extensions with a location spoofing function. This leaves ample space to unblock Netflix US abroad or enjoy any other library overseas on a multitude of systems. Visit NordVPN Website Our tests have shown that they're streaming-ready, so you usually don't have to fix or tweak anything. Connecting to a server is pretty much all you need. Last but not least, they're risk-free for 30 days, so if you're unsatisfied with one, you'll be able to get a full refund and try another one. Just give free VPNs for Netflix a miss — they're far from good and even farther from extraordinary. 2. Clear Your Browser Data Some issues are bound to occur even with the creme de la creme Netflix VPNs. However, they're usually resolved in a few simple steps. If you're still getting that Netflix proxy error, consider wiping your browser data. Browser data consists of cookies and cache. These bad boys (or girls — we won't assume genders) can make your plans go awry. Cookies and cache contain some location data that can be divulged to the website you're trying to visit. You can have an IP from another country, but if these leftovers say you're in your native country, say 'goodbye' to your happy Sunday afternoons. Luckily, clearing your browser data is pretty simple: Launch your browser (Chrome, Brave, Firefox, etc). We'll use Brave. Go to Privacy and Security. At the very top, select Delete Browsing Data. Under the Basic tab, select all three options. Make sure to select the time range — we usually choose the last 24 hours, but you can do more or less and see what works for you. Finally, click on Delete Data to complete the process. After the browser restarts, connect to a VPN server again and see if the problem has vanished. PRO TIP: After clearing your browser data, also try to access the streaming platform through your browser's Incognito window. It seems to have a positive effect for many users who are struggling with a VPN that's not working with Netflix. 3. Use a Different Server One of the easiest fixes is to use a different server. I mean, it's a no-brainer, but although it sounds logical, this fix won't always work, especially if you're using a different server in the same country. However, it's worth giving a shot if you're struggling to access geo-blocked Netflix movies and series. Open up your VPN and instead of just clicking or tapping the country, choose a specific city-level server. If it doesn't work, do the same, but pick a different one instead. Try out your luck, and after a bit of experimenting, you should be able to pick the one that works. 4. Experiment With Protocols Modern VPN providers offer a handful of protocols, each with its distinct function and characteristics. We explained OpenVPN and WireGuard here, but there's more than meets the eye when it comes to protocol selection. If you choose NordVPN, ExpressVPN, or Surfshark, you'll have several protocols, such as: NordLynx , NordWhisper , and OpenVPN (NordVPN) , , and (NordVPN) Lightway , Lightway Turbo , and OpenVPN (ExpressVPN) , , and OpenVPN (ExpressVPN) WireGuard, IKEv2, and OpenVPN (Proton VPN) The first two have proprietary protocols worth trying out. NordLynx, in particular, is great at overcoming geo-blocks, while NordWhisper avoids network filtering. Lightway is more speed-focused, while the Turbo version leverages multi-lane support for even faster speeds. Both Lightway options support UDP and TCP standards. Unblocking content is usually easier with TCP, while UDP focuses more on performance. We also recommend dabbling in OpenVPN and IKEv2 — these two were massive before WireGuard overthrew them. Usually, the best option is to let the VPN decide on the protocol. However, when you want to address a VPN not working with Netflix, you aim to think outside the box and break the shell around you. Switching your protocols won't hurt — you can go back to the 'Automatic' option anyway. Try this and see if it works for you. 5. Try a Dedicated IP Address Netflix has learned to be wary of users trying to access it through a VPN. Apart from deep packet inspection, the service is programmed to detect VPN-originating IPs cunningly. Namely, it can detect shared IPs by observing the level of usage. If the IP is overused, i.e., it's sending multiple requests at a time, chances are it's shared by multiple users. In that case, the IP is promptly blocked and kept on Netflix's blacklist. Next time you use this IP, Netflix won't work with a VPN either. The solution lies in a dedicated IP, which, as its name implies, is used only by one person. This, you'll agree, sounds much less suspicious. The downside is that a dedicated IP is in one location and is charged per IP address. Plus, you must have an active VPN subscription to get it. If you're okay with that, NordVPN is the best VPN for dedicated IP addresses. It offers dedicated IPs at as low as $4.19/mo for 24 months. Try Dedicated IP Addresses from NordVPN Plus, you can pick from multiple locations, including the USA, the UK, Canada, Japan, Poland, Germany, France, Norway, South Africa, etc. The said price applies to one IP, so you'll have to decide on which catalog you want to watch. After that, purchase it and you're all set. Just a quick tip: go for the monthly plan to ensure your dedicated IP address works with the Netflix library you want to access. If need be, you can extend your plan to a year or two, and use your IP for binge sessions. 6. Disable Your IPv6 Address Disabling your IPv6 is a good fix to try if you've run out of 'gas'. At this point, however, we believe you've fixed your problem of Netflix not working with a VPN. If you're unlucky, disabling your IPv6 might be the magic you're looking for. Here's how to disable it: Windows 10 & 11 Go to Settings. Select Network & Internet. Click on Advanced Network Settings. Locate your adapter, and under More Adapter Options, click Edit. Find Internet Protocol Version 6 (TCP/IPv6) and uncheck it. Press OK to confirm your settings. macOS Open System Settings. Go to Network. Select Wi-Fi and find your network. Click Advanced next to the selected network. Select TCP/IP and in the drop-down selection, press Configure IPv6. Click Link-Local Only and confirm your settings. 7. Reach Your VPN's Customer Support If all else fails and the doom and gloom slowly approaches, take a moment to contact the support team of your VPN. They should be able to help additionally or even provide specific servers that you can use to fix the VPN not working with Netflix. Just mention the library you want to access and let them find a working server for you. Connect to it, and you should be good to go. We had a good experience with NordVPN a while ago when the support team explained to us how to access ESPN Plus abroad. They advised us to use the browser extension and select a specific US server. Guess what? It worked! How Does Netflix VPN Blocking Work? It's important to know how Netflix VPN blocking works to know how to overcome it. As explained, the service uses many tricks to counteract VPN users. One of them is to blacklist IP addresses associated with them. To detect such IP addresses, the platform checks if the IP is assigned to multiple users by determining the amount of traffic it sends. If an IP sends out an unusual amount of traffic, chances are it belongs to a VPN. There's another, more cunning trick, which involves detecting discrepancies between the user's DNS settings and original IP address. This trick usually works better on iOS and Android devices. We need to clarify that Netflix doesn't block VPN users, but rather IP addresses associated with VPN services. This means that detection won't result in account termination. You can keep using your account regularly, no matter what, which is a relief for VPN users. Why is Netflix Blocking VPNs and Proxies? Streaming services operate according to licensing agreements and copyrights. The same applies to TV channels that can usually broadcast only in their respective countries. We're not experts on this subject, so we'll just say that legal obligations are in the background of the issue. If Netflix has a license to broadcast a movie or series only in specific regions, it'll prevent users from other countries from accessing it. This, in fact, harms Netflix's profit, because these 'illegal' streams don't bring any money to the company or the copyright holder. While geo-blocks are an inconvenience, they're there for valid reasons. Hurdling geo-blocking is possible with a VPN, but according to many, not the most 'ethical' thing to do for the reasons mentioned above. The Bottom Line A VPN not working with Netflix can be a huge setback. Without it, you'll have to be content with not catching up on the latest episode of a binge-worthy show. Luckily, quite a few fixes we listed can aid your endeavors and ensure the VPN does its job without inconveniences. First and foremost, it's vital to choose a reliable provider, and our #1 is NordVPN. ExpressVPN and Surfshark follow closely. Once you're equipped with the right toolkit, watching Netflix shouldn't be a problem. If it is, abide by the steps presented in this guide. Try NordVPN Risk-Free Today

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