They Just Don't Get Netflix!

NEW YORK (TheStreet) -- Posting on Facebook (FB), Netflix (NFLX) CEO Reed Hastings trumpeted the happy-faced fact that his company's monthly viewing total topped one billion hours -- and all heck broke loose.

The stock ran up, and much of the media nodded approvingly. After all, Netflix reported two billion viewing hours in the entire December quarter.

Many media outlets -- such as MarketWatch -- put the showy "one billion" in the headline. They gave no context; instead, they reviewed the old pricing kerfuffle. (In a public relations blunder, Netflix raised prices indelicately.)

There are several deeper levels of understanding, though. When a CNBC reporter noted that Netflix had "reached a really big milestone," @herbgreenberg rightly pointed out that "we don't know the economics of those streaming hours."

Though MarketWatch was happy to call Hastings "upbeat" and leave it at that, @herbgreenberg pointed out that Reed also bragged "House of Cards" and "Arrested Development" will blow those numbers away, and will raise expectations for the company to deliver bottom-line progress to Wall Street.

Bloomberg also added to a level of understanding that went deeper than a flashy headline number: It examined the streaming-media giant's balance sheet.

Speaking of a billion, Netflix has less than that in cash, which doesn't look so great set against its nearly $1.5 billion in current liabilities -- money due in the next year.

Worse, as Bloomberg points out, is the matter of its minimum of $3.7 billion not on the balance sheet, due to Netflix's contention that it doesn't know precise fees, or that the movie title the fee is designated for is not yet available.

That's quite a bit more complex, not-suitable-for-a-happy-Facebook post. But it's the sort of complexity that might, in the end, have more impact than the happy-faced one-billion hour number.

At the time of publication, Fuchs had no positions in any of the stocks mentioned in this column.

Marek Fuchs was a stockbroker for Shearson Lehman Brothers and a money manager before becoming a journalist who wrote The New York Times' "County Lines" column for six years. He also did back-up beat coverage of The New York Knicks for the paper's Sports section for two seasons and covered other professional and collegiate sports. He has contributed frequently to many of the Times' other sections, including National, Metro, Escapes, Style, Real Estate, Arts & Leisure, Travel, Money & Business, Circuits and the Op-Ed Page.

For his "Business Press Maven" column on how business and finance are covered by the media, Fuchs was named best business journalist critic in the nation by the Talking Biz website at The University of North Carolina School of Journalism and Mass Communication. Fuchs is a frequent speaker on the business media, in venues ranging from National Public Radio to the annual conference of the Society of American Business Editors and Writers.

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