taylor: taking a look at how equities performed across the day, needless to say, not good. the s&p 500 breaking the 200 day moving average yesterday with big tech measured by the nasdaq 100. you are off 10% from the recent high. i will point out that the stock index is off and approaching the bear market territory. bearish sentiment has been coming into this, it's an individual investor. take a look at the bears really taken control, rethinking the

way that we are evaluating the markets. that was the market wrap. "what'd you miss?" starts next. caroline: i'm caroline hyde. netflix, tumbling and u.s. after our trading after subscriber outlook misses estimates and in the triple take we dig into the numbers. tech stocks, under pressure for all the second half of today. this won't help in that regard. romaine: yeah, talking about what's been going on with regards to netflix itself and the subscriber numbers, they are projecting 2.5 million subscriber numbers in 2022. the street was looking for 6.2 6 million. below what the street was looking for. paid membership numbers coming in in line with your revenue number slightly below here where

the estimate had been for 8.1 2 billion. flipping of the board here, what are we taking a look at here next? the shares are down 18%. this is pretty significant here. this is obviously post-market trading. what happens in the cash session would be different but this is one of the biggest declines we have seen in their stock should it carry tomorrow morning. taylor: and it had already been off your today. let's continue with our analysts. let me start with you. recap again. what is behind the big disconnect between what the company is forecasting and what happened? >> most were looking at a

reversion to a normalized trend pattern. we obviously had the big covid up of 2020 and the slump of 2021. with that whole market slate and realization that the apps would get back to normalcy. again, it looks like the covid hangover hasn't really left netflix. that's what they seem to be saying in their investor letter. a lot of those macroeconomic hardships in the region. they also talk of course about their content. meaning like their biggest series not coming on until later in the quarter, which means i think it is hard for them to kind of forecast based off the current trends they are seeing. caroline: covid overhang running clear, they acknowledge that it has only intensified, the

competition. they still try to say that this is a market for the taking, that the transition from linear to streaming is the greatest opportunity. do you still by that? >> i mean on revenue they were on target, sorry, they beat on profit and were on target on revenue, but they missed on subscriber ads and that is the most critical metric. with netflix there is a 100% direct correlation between subscribers and revenue, unlike their competitors that have more complex business models. looking going forward, yes, netflix is still a robust business. streaming is still very much the future of entertainment. but clearly the competition is catching up to them. romaine: this brings up an issue that investors have been pointing out for years, this is a relatively mature company yet their primary source of revenue

still comes from subscriptions in there is a question here as to how they can maybe monetize their existing base of users without having to rely on massive jumps every quarter, presuming it slows down. >> yeah and i don't think they can. they have been able to up until this point but they have essentially reached a ceiling in the u.s.. they still have a lot of growth ahead in other markets but they won't be as profitable for them. but that is why we are starting to see them pivot into things like gaming and e-commerce because they have essentially maxed out their subscription monetization. romaine: same question to you, is there a business model for netflix that goes beyond just subscriptions? >> it's a very important in very good question. this is something we have pondered for a long time. is it time for netflix to finally get into the advertising business?

we know that they have vehemently said no to advertising. it is a product of fundamentally opposed to advertising, they don't want to irritate or annoy the users but at this point when there is not much more headroom for raising prices and you want to go after a much larger subscriber base, it might be time to pull that lever and introduce, you know, a lower-priced ad supported tier to reinvigorate subscriber growth. especially fares well in international markets where it is really important to keep prices really low and it might be time for them to take a look at that model as well. taylor: that goes against what the company has said lately. fresh notes out there, saying they want to talk to the executives on the call if they are still confident in their long-term view. is it achievable? what's the churn when you start getting to that level?

>> they have been able to keep the churn under control until now but the more they raise prices, the more they risk increasing churn. and with more competition there is the risk of churn. i agree that it's time for them to reconsider advertising. i was kind of chuckling before because anytime it has been raised to netflix management, they have consistently said that they are not going to go there. it remains to be seen how they pivot to business, but it's definitely time for them to think a little more broadly outside of what they have done so far. caroline: previous earnings are subscribers to a large extent. free cash flow they say is going to be positive for the full year , 2020 two and beyond. does this give you confidence that they will be able to remain a profitable profit-making

business for everyone? >> definitely. they have a lot of operating leverage in the model that the market is overlooking right now given the headline numbers. ultimately they will be able to grow revenue at a faster pace than costs. when you put the big picture together and you look at this model over the next three years to five years, i definitely think that this will be a sustainable and free cash flow positive company. that said, the operating margin guidance for 2022 is not inspiring much guidance at the moment. the reason they point to is the revenue pressures because of the u.s. currency strengthening, kind of not giving them that much operating margin. romaine: a quick last question to you here, paula. the cofounder of this company that has been at the top since the founding here, do we think at all that there is a need or

necessity for someone new to run the company as ceo? >> he did bring in ted sarandos. we talk about netflix as a tech company but i see them as a entertainment company that is using tech to inform decision-making and i think that ted sarandos as the head of content is probably as far as they are going to go in changing leadership and i don't think that, unlike other companies were you really, where the problems scream for a change of leadership, i don't see that is the case with netflix. i just see them as having more competitive pressure going forward but still having a leadership team that is equipped to take it on. caroline: great to have your takes on the insider intelligence. coming up, more insight on the competition in the streaming sector.

the ceo of curiosity stream. what is he seeing in terms of subscribers? this is bloomberg.

romaine: this could be one of the force declines of 2014 after the earnings of today's triple take ken it's not just about netflix but it is about the world of streaming that got a lot more crowded. the streaming rivalry has intensified, leading to explosive growth since start of the pandemic. taylor: netflix saying that the streaming rivalry has only

intensified. we talked about cash is king in the market content is king with the streaming. that's arguably what drives the downloads, as you can see. taking a look at the top gains, it be on tax, disney but. -- disney plus. long-term, they still have it there at the top with the launch of their app. it's a huge difference, but when you think about all these new players that we have started to talk about on the screen, it's only been the last few years. romaine: a couple of years ago we were talking about how there were like hundred different services out there. caroline: how many do you have? romaine: a lot. i was one of those people saying that we would never have more than one or two and now we have, what, six? and i know some people have more than that. six that we pay for. caroline: let's hear about the ones that taylor pinches from

her family members. meanwhile, more insight, we have the ceo of curiosity, operating the flagship curiosity stream. what do you make it, clint, of the never-ending numbers on streaming products and whether or not the pie can keep on getting bigger or not? clint: it's the early innings and when it relates to netflix i think they have escape velocity. no one is catching them. they have been kind of content to essentially go it alone, grow organically through lots of lots -- lots and lots of content debts -- bets. it of it -- inevitably leads to successes like squid game, house of cards, or even you. when it was presented on a larger platform with meaningful promotion it was a breakout hit, small performer on lifetime.

that's their power. they have a lot of upside, a lot of ways to monetize delivery. controlling the global rights if you want to do that. a lot of opportunities for them. romaine: talking about curiosity stream, to have a niche service like this with regards to type of content, when you look at a netflix or disney plus that has a much sort of broader base of content the regards to the type of audience it is going for, how does curiosity stream fit into that? you have really held your own with content that is much more targeted? clint: thank you. we are pure factual content company. the market was wide open for it. today we had 5000 titles

available to consumers, one hundred 75 countries. 23 million subscribers across the platform and for us it comes down to content. in 12 months we premiered more programming than at any time in the history of the company. all really in part due to the premier of titans, the rise of wall street, eight part narrative series that dramatically details the story of american finance. romaine: talk more about that, i hear it's going to be big. [laughter] caroline: our very own romaine bostick, fast forward to minute 38, there he is in all his glory. [laughter] clint: and i think that romaine does a great job really capturing the essence of, you know, but many of these titans were all about. for a lot of them it came down to pure competition and a need

to kind of neat the next guy. you know, our producing partner on the series, he details the story of american finance with a particular focus on the rivalries. morgan, sachs, rockefeller. obviously a great collection of experts. from jeremy sorry to laura martin to romaine. [laughter] taylor: we are cutting the video to put it out there because we are so proud of him. you talked about content being king. we had spoken earlier on the planning call, not long ago, streaming companies saying that competition was videogame developers because you are competing for time and attention . what does competition look like to you? clint: competing with everybody,

right? we like we have a unique position, monetized through streaming and sponsorship and through content licensing. our continue to develop a great factual service we could become a trusted resource in the home. valuable as an independent company and over the next three or four years as we evolve into a scenario where there is seven or 10 big global streaming services, everyone of those companies will need a strong, factual solution. our goal is to continue to build great products. caroline: talk to us about the

consumer within their. what we saw from netflix last week was the increase in prices. they are really going as an international focus in europe and asia in particular with squid games. what are you seeing in terms of the consumer ability for price increases. clint: i think we have pricing power in north america and many of the more developed countries. we are basically what you use to pay for a dvd per year. we have had service in india. a lot of growth there. working with distributors there, you could see a few others, but the way that we see the global market is we have got a great service to anyone who wants to subscribe directly but there is

a distribution market that we are focused in on. we did a really interesting partnership over the last year in german-speaking europe as well. taylor: really appreciate it, clint. focusing on all things like pricing power and competition, you name it, it's been the titans of wall street when jamie dimon and his pay being raised 10% to 2021 and we joke here of course that inflation is 6% to 7%, pay another 10%. 34.5 million. caroline: isn't he just taking his first paycheck in bitcoin? i'm watching it currently. they haven't built in that

ability to pay. taylor: netflix, pushing beyond tv and film, it's videogame ambitions and that is next. this is bloomberg. ♪

romaine: welcome back it, the triple take is focused on netflix and altering's streaming. saying it wasn't the other streaming services but it was fortnite and the gaming. they came out with a shareholder letter addressing the issue saying that in 2022 they would expand across casual and core gaming genres as they continue to program around whether members enjoy.

>> it's pretty early right now, they introduced to their first games in the back half of 2021. they started with four or five games. these are all primarily mobile games that you can play. you are only going to play them for a couple of minutes. pushing a ball up, getting it through the hoop. probably not what you will be addicted to. they tend to test. caroline: making key purchases, you think? lucas: they have done some small acquisitions but i don't know about a big one. big gaming acquisitions are on everyone's mind, something on the scale of that activision deal seems unlikely. i would suspect that if they see a lot of success with gaming,

working slowly to purchase small companies. how do you further monetize that -- taylor: how do you further monetize that? lucas: for the time being it is additive. you saw netflix raise prices again in the u.s. and canada. they have phased it in. that is how they will use it, as another reason you have to pay more for your netflix service, like a big bundle. caroline: lucas, always great to catch up with you and thank you for the inside track. looking at the impact that netflix has on the market already, like you said, the biggest selloff. like joe said, shaving off the

market cap. romaine: even if it isn't the heaviest weighted, it will weigh on the sentiment. taylor: competitors of netflix as well. this is bloomberg. ♪

> you mentioned last year that you are starting a factory in the u.s. where are you, what kind of money are you looking to have it deploy? putting in about 6 -- >> we have put in $6 million so far. >> from the heart of where innovation, money, and power collide in silicon valley and beyond, this is bloomberg technology with emily chang. emily: i'm emily chang in san francisco and sign up slow down, netflix missing on subscribers. we break down the numbers. plus, pressing