What Does Josh Brown Think Is Netflix's Biggest Problem?

Josh Brown says Netflix's biggest problem is a comparison the company cannot do much about. Wall Street is obsessed with time spent, and YouTube has lapped Netflix at twice the hours. He doubts a lot of that YouTube time is chosen, because the next video autoplays, but it is still the number under the microscope.

He calls Netflix the stock he has been the most wrong about this year. He bought at 100, down from 140, bought more in the 80s and again in the 60s, sold half in the 70s just before the company reported, and says the shares are now 63, a slow bleed. The business is hugely profitable, about $3 billion a quarter, and still expanding outside the United States. The movies and the typical shows are not good enough, and the $20 billion a year film and TV budget has to be spent better, which Netflix has done before. Trying to be a lighter YouTube, with podcasts and games, will not work. He points to East of Eden as the best thing Netflix has made in five years, to a programming lead who came from Disney, and to House of Cards in 2013 as the model: shows people are upset to have missed. He expects Paramount to make that same bet on HBO. Ed Elson still wants Netflix to buy independent podcasts.