2019年4月17日

Netflix now expects to burn through $3.5 billion in cash this year

Netflix’s cash-burn problem is going to get even worse before it gets better, the streaming-video service provider now expects its operations and investments to burn up $US3.5 billion in cash this year.

Netflix made a change to its corporate structure that will increase its taxes this year, they're also plans to invest more than it previously expected in real estate and other infrastructure. Netflix promised the company’s free cash flow, which represents the net amount of money a company generates from or consumes in its operations less the amount it invests in property, equipment, and other long-term assets, would start to turn around next year.

Despite recording regular profits, Netflix has posted negative free cash flow every year since 2011. The difference between its reported bottom line and its cash outflow is largely because of an accounting issue that’s a result of its huge and ongoing investments in original shows and movies. In order to finance its cash deficits, the company has repeatedly gone to the bond market to sell debt. The company’s long-term debt now stands at $US10.3 billion, up from $US6.5 billion at the end of the first quarter last year.

Blackmores needs to engage with China's powerful personal shoppers

Blackmores shares initially tumbled 7 per cent in early trading on Tuesday to $83 after an ominous slide in profits and revenue. Blackmores will be “buggered in the long run” unless it can re-engage with powerful daigou traders who have spurned the vitamins company because it lacks inspiring new products.

Blackmores faces a serious uphill battle in the short term after net profit after tax plunged 43 per cent in the three months ended March 31 to $9.9 million, and revenue dropped 4.3 per cent to $141 million. The company has fallen out of favour with big daigou traders, the entrepreneurs who buy large volumes of stock from Australian retailers such as Chemist Warehouse and sell them online in China on various e-commerce sites.

Blackmores had fallen into the trap of being too focused on managing for short-term profit growth and had not placed enough emphasis on new-product development. The company estimated sales to Chinese consumers were down about 6 per cent in the March quarter. Chemist Warehouse was a highly valued retail customer, had permanently shifted the business models in vitamins retailing, with rivals also employing aggressive discounting. 

A major review had been undertaken on China strategy, with the company now putting much more focus on supporting daigou traders to “more deeply engage” with the Blackmores brand. They're also accelerating a cost-cutting program targeting $60 million in savings over three years. The company also backed off on aggressive promotional deals undertaken in the March quarter last year. Gross margins increased 2.1 per cent as a result.

Healthcare is a key growth area for tech companies

At Microsoft’s recent Future Now conference, Chief Medical Officer Dr Simon Kos delighted an audience with a future vision for the technological potential in healthcare. Kos sees health’s precision medicine, and personalisation of care as the new frontier encompassing physical, mental and social aspects that ultimately determine our health and wellness. The future is about leveraging vast amounts of health data and turning it into usable insights that augment and optimise the delivery of care. 

1. Precision Medicine

Precision medicine relies on genomics to provide doctors with information around treatment and prevention. It can determine what the right treatment plan is for you as an individual rather than patients like you, and that means a higher likelihood of getting the right treatment the first time. And it can take hundreds, sometimes thousands, of unique algorithms to analyse the billions of data points from patients’ genetic profiles.

2. Mental Health Care

A tech-enabled model of care leverages data to predict best practice measures and also uses telepsychiatry to connect with people on a more regular basis. Patients in this model develop far stronger, more trusting connections with their medical health provider.

3. Personalisation and prevention

People want a personal health record that’s fed actively with information from qualified feeder systems and they want some sort of artificial intelligence (or agent) to use that data, and mine it for insights, and feed it to them in snackable, actionable ways. Prevention is one of the key areas for health because ignoring health problems can end up costing 2-3 times more. In the next five years, we’re going to see some radical change as these new models of care, enabled by technology are proven locally and internationally.