Netflix CEO: Answer Our Questions (Now)

NEW YORK ( TheStreet) -- Netflix ( NFLX) reports earnings Oct. 21, three days before my daughter's birthday.

She doesn't watch Netflix much anymore, particularly after Viacom's ( VIAB) Nickelodeon programming disappeared. That said, I would never let anecdotal evidence cloud my judgment. That said, maybe as a birthday gift for a guy who lives vicariously through his daughter, Netflix CEO Reed Hastings could answer a few questions.

Or maybe Rich Greenfield of BTIG Media can pass them along. For the second quarter in a row, Greenfield "moderates" the call, but not with CNBC's Julia Boorstin this time. The bullish Greenfield rocks the mic with, sit down for this one, a bullish NFLX analyst from JPMorgan.


But I would like more than mere answers, namely because Reed Hastings' answers often suck. Like when Julia asked him why Netflix refuses to report churn. Reed opened the non-answer with his favorite talking point -- We're not like traditional television, so, churn really doesn't matter. In fact, as CEO, I never look at it so neither should you!.

As Netflix desperately vies to become part of the establishment it claims to disrupt -- cable -- maybe Julia or Rich could re-ask this question using this newish angle. I can think of several ways to position the query as to respectfully and logically demand an answer.

But, forget about churn, there are other issues Hastings must not merely answer to, but provide context around.

First, I want him to explain why his company just secured streaming rights to FX's hit series Louie. I purchased the entire season roughly six months ago for $20 through Walmart's ( WMT) excellent Vudu platform and could have done the same via's ( AMZN) Instant Video.

There's a reason why Netflix gets this type of programming way late, if it ever gets it at all. I know the answer to this question -- see Netflix Riding a Death Spiral to Insolvency -- but I want Reed's version of it, along with something he's reluctant to give . . . context.

Second, I want Reed's take on the sustainability of the company's spending habits. Off-balance sheet debt continues to explode, now at approximately $6.5 billion. That's up about 550% from just over one billion dollars 2.5 years ago.

Then there's the news from AdAge that Netflix is spending like mad across Latin America (to lackluster results). For instance, it blew over $7 million on Internet display ads in Brazil in June alone. That makes the reported $3 million to $4 million Netflix spends per episode on House of Cards look like child's ... actually, no, that's way too much money.

Because, third, how much did Netflix spend, Reed, on ads in trade magazines looking to buy votes for the key Emmys HOC didn't win? Like best actor and best drama series? Can you quantify for us how all of this spending shakes out on a per-subscriber basis?

You speak, from time to time, about the level of excitement that proceeds and accompanies the release of a HOC or Arrested Development, yet refuse to clue us in as to how many subscribers have watched these shows. We know you don't sell advertising, but what's the spend per sub? Are enough subscribers watching this stuff to benefit the churn metric you don't report and bring in new subscribers? Seems like more than material information to investors.

If Reed won't answer these questions -- with context -- maybe we ought to ask the SEC for its opinion. Surely that organization expects companies to keep investors privy to the key information that can help them make better-informed investment decisions, not speculative trades predicated on blind faith.

Seems to me Netflix should have no problem releasing viewership data -- we can crunch the numbers from there ourselves -- given the aforementioned "excitement" Reed likes to tout.

That's just the beginning. I could ask for more, but, given Netflix's history and the strange formats it chooses for its conference calls, I'm not holding my breath on getting anything other than the same old smoke and mirrors jive talk we've become accustomed to.

-- Written by Rocco Pendola in Santa Monica, Calif.
Rocco Pendola is a columnist and TheStreet's Director of Social Media. Pendola makes frequent appearances on national television networks such as CNN and CNBC as well as TheStreet TV. Whenever possible, Pendola uses hockey, Springsteen or Southern California references in his work. He lives in Santa Monica.