8 Comments
Apr 25, 2022Liked by The Science of Hitting

Marvellous yet again. Really admire your ability to cut through the numbers and lather on the qualitative perspective with the data in support.

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Apr 25, 2022Liked by The Science of Hitting

Great post and thank you! How do you get comfortable with valuing the company on EBIT, given the disparity between earnings and cash flow (perhaps even less likely to resolve in the near term now given sub headwinds may force more content spend to maintain their market position)? I'm also still not sure where I sit on the idea that current content amortisation costs represent "maintenance" content spend and would love your take!

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Apr 26, 2022Liked by The Science of Hitting

"still early days in pretty much every market around the world. We're ~20% penetrated in broadband homes and there's 800 million to 900 million broadband and / or pay TV households around the world outside China… We don't see why we can't be in all or most of those homes over time if we do our job.”)" from my observation these countries in general have lower per capita income and piracy remains a big issue/headwind for the industry.

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Apr 25, 2022Liked by The Science of Hitting

Really appreciate the comments here and agree with most of what you have said. The main issue I am having is thinking through the fact that the industry as a whole seems to be shifting into a permanently more capital intensive model (not to mention the fact that while a sub model may be better it certainly entails a push out on cash returns vs. the traditional 'window' paradigm). How are you getting comfortable with the eventual cash conversion? What drives the improvement in that change in FCF conversion for you?

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