In all the gushing over Netflix, there's room for caution

The reaction is predicable. The share price is not.

With a certain depressing predictability, the newspapers today are gushing in their praise for Netflix. The US-headquartered service now streams video to US 29.17m subscribers, up just over 2m since the start of the year, enabling it to claim to be the most watched network in the US.

Netflix added another 1m streaming members outside the US in the first quarter, bringing total international subscribers to 7.1m. It currently offers its service in Canada, Latin America and since early 2012, the UK. Netflix’s first quarter results provided a further boost to a share price that has been skyrocketing of late: at the end of last September, the share price was $55.

Since then, the share price has risen almost four-fold to $213. According to Netflix, its future success will be boosted by producing original content. The sum total of its original content to date is the grand total of one programme; that requires a generous definition of original, namely a remake of House of Cards.

It currently charges £6.99 per month in the UK; by contrast, the BBC licence fee seems really quite a snip. Just before potential investors empty the piggy bank and rush to invest in Netflix shares, they might care to reflect on the nature of this market sector. Netflix’s main rivals, the Amazon-owned LoveFilm and HBO, are not going to go away any time soon and can be expected to fight back.

If and when Amazon bids more aggressively for the rights to film and TV shows, the acquisition costs for Netflix cannot but rise. Also, as a number of sharper analysts have spotted, Netflix may have cash flow challenges, with $3.3bn in off-balance sheet content liabilities and only around $1bn in cash. As for producing further fresh content: House of Cards cost around $100m to produce. At that sort of cost, do not expect too many headline grabbing productions of that calibre to follow any time soon.

One other thing jumps out from the first quarter Netflix results and that is how way out the performance of the firm is compared to the management predictions. If the firms own management finds it so hard to predict its performance, heaven knows how the analyst community will get on in their forecasts.

Investors may get lucky and Netflix could be an acquisition target for an Apple or a Microsoft in the coming months. On the other hand, the shares are wildly volatile; not shares one would suggest for savings put away for a rainy day.

Photograph: Getty Images

Douglas Blakey is the editor of Retail Banker International

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How the Lib Dems learned to love all-women shortlists

Yes, the sitting Lib Dem MPs are mostly white, middle-aged middle class men. But the party's not taking any chances. 

I can’t tell you who’ll be the Lib Dem candidate in Southport on 8 June, but I do know one thing about them. As they’re replacing a sitting Lib Dem (John Pugh is retiring) - they’ll be female.

The same is true in many of our top 20 target seats, including places like Lewes (Kelly-Marie Blundell), Yeovil (Daisy Benson), Thornbury and Yate (Clare Young), and Sutton and Cheam (Amna Ahmad). There was air punching in Lib Dem offices all over the country on Tuesday when it was announced Jo Swinson was standing again in East Dunbartonshire.

And while every current Lib Dem constituency MP will get showered with love and attention in the campaign, one will get rather more attention than most - it’s no coincidence that Tim Farron’s first stop of the campaign was in Richmond Park, standing side by side with Sarah Olney.

How so?

Because the party membership took a long look at itself after the 2015 election - and a rather longer look at the eight white, middle-aged middle class men (sorry chaps) who now formed the Parliamentary party and said - "we’ve really got to sort this out".

And so after decades of prevarication, we put a policy in place to deliberately increase the diversity of candidates.

Quietly, over the last two years, the Liberal Democrats have been putting candidates into place in key target constituencies . There were more than 300 in total before this week’s general election call, and many of them have been there for a year or more. And they’ve been selected under new procedures adopted at Lib Dem Spring Conference in 2016, designed to deliberately promote the diversity of candidates in winnable seats

This includes mandating all-women shortlists when selecting candidates who are replacing sitting MPs, similar rules in our strongest electoral regions. In our top 10 per cent of constituencies, there is a requirement that at least two candidates are shortlisted from underrepresented groups on every list. We became the first party to reserve spaces on the shortlists of winnable seats for underrepresented candidates including women, BAME, LGBT+ and disabled candidates

It’s not going to be perfect - the hugely welcome return of Lib Dem grandees like Vince Cable, Ed Davey and Julian Huppert to their old stomping grounds will strengthen the party but not our gender imbalance. But excluding those former MPs coming back to the fray, every top 20 target constituency bar one has to date selected a female candidate.

Equality (together with liberty and community) is one of the three key values framed in the preamble to the Lib Dem constitution. It’s a relief that after this election, the Liberal Democratic party in the Commons will reflect that aspiration rather better than it has done in the past.

Richard Morris blogs at A View From Ham Common, which was named Best New Blog at the 2011 Lib Dem Conference

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