Netflix, Inc. (NASDAQ:NFLX) reported earnings after the closing bell, which made investors giddy (to say the least). Shares were up 5.57% during the trading session, and are up a further 35% in after hours trading. CEO, Reed Hastings, Carl Icahn, and Whitney Tilson are likely very happy tonight. We have the full list of the happy shareholders listed below:

Netflix largest shareholders

Since we like to present a balanced picture, it is vital to mention the unhappy campers as well. So before we begin with Netflix, Inc. (NASDAQ:NFLX)’s strong numbers we note the sad (and angry) analysts (and certainly customers) of Wedbush research. Just yesterday, Wedbush issued a new research report titled, ‘ Q4:12 Preview: Expect Subs and EPS at High End of Guidance; Sustained Domestic Subs Growth, Profitability Elusive; Maintain UNDERPERFORM, $45 PT.’ Since the time of issuance (yesterday) shares are up close to 30%.

We note Wedbush’s main points below:

• Netflix continues to drop more content than it adds, limiting the company’s long-term growth and profitability potential. The recent The Walt Disney Company (NYSE:DIS) exclusive was likely expensive, replacing its cheaper nonexclusive deal with Starz that provided roughly double the content for less money. More important, the best content will be unavailable for years. Other new deals provide cartoons, cable TV series, and serialized dramas, all unlikely to meaningfully boost subs. In the meantime, Netflix has dropped A&E/History Channel, and we expect more content to be dropped this year, especially as the recent expensive deal with Warner Bros. takes effect. Higher costs diminish profitability, while lower content quality impacts subscriber

• Recent silence from Carl Icahn suggests he may have unwound his stake. Carl Icahn had no comment when Netflix received a Wells Notice, and shares have approached the reasonable takeout target he proposed when he first went public.

• Maintaining our UNDERPERFORM rating and 12-month $45 price target. We value domestic streaming at $15, domestic DVD at $20, and assign a speculative $10 option value to international streaming. Should domestic streaming growth slow or domestic DVD segment losses accelerate, our target may be too high.

Now back to the happy investors! We have obtained a transcript of the conference call, which runs 23 pages long. We highlight some of the key data below:

Reed Hastings – Netflix, Inc. (NASDAQ:NFLX) – CEO, stated on the conference call:

Both the rise of tablets, phones and the rise of smart TVs are very helpful to us and they’re really the beginning of a trend around Internet connected ecosystems with devices. And certainly the more convenient those devices get, the more people will feel comfortable watching and enjoying content on a wide range of devices. Some day including Google glasses, Internet watches, all kinds of scenarios over the next five years. And as well as multi-screen scenarios where you use your tablet or phone to choose content on the TV. So what we’ll see over the next couple years when we saw in this fall also was more and more consumer adoption of Internet connected screens which are both tablets and smart TVs.

Ellie Mertz – Netflix – VP Finance & IR

What’s the percentage likelihood that you increase the price of your streaming plan over the next 12 months or even over the next 24 months?

Reed Hastings – Netflix – CEO

We’re happy at $7.99 and not speculating on the future.

Ellie Mertz – Netflix, Inc. (NASDAQ:NFLX)- VP Finance & IR

You talked about improvements in both voluntary and involuntary retention. Can you give us some color on where churn levels are relative to historical numbers? Are you back to pre fall 2011 levels?

Reed Hastings – Netflix – CEO

That was a really different business when it includes DVDs, so I’m not going to focus on that comparative reference. But what we are doing is seeing nice improvement again relative over this last year when we’ve been on the straight streaming side. And we’ll continue to look at that. The fundamental though is not to focus, or we don’t focus, on churn because we really want to make it easy to quit. I know that sounds strange. But we spend a lot of time so that if you leave, you have a really good experience and that makes you much more likely to come back in. And we think that’s the right way to build a long-term growth in paid ads but it does result in easy exit.

Ellie Mertz – Netflix – VP Finance & IR

What changed the attractiveness of the The Walt Disney Company (NYSE:DIS) content, which last year only accounted for 2% of your streaming hours? Was it solely the ability to be exclusive? Was it the Lucasfilm acquisition?

Reed Hastings – Netflix – CEO

It is pretty amazing that the The Walt Disney Company (NYSE:DIS) content when it was on our service from Starz was only 2%. And it just shows you how much incredible great content that we have, that content as good as the Disney content could only be 2%. Going forward, in addition to the straight Disney content, were the Disney Marvel content and the Lucasfilms, so it’ll be bigger than it would have otherwise. But the rest of our content is growing. The big thing that we’re excited about with the Disney content, once it eventually flows in, is it’s fully exclusive to Netflix. And as we’ve been talking about, we’re more and more interested in exclusive content.

Ellie Mertz – Netflix – VP Finance & IR

How do you plan to market House of Cards? How does your approach to marketing the show differ from how traditional cable networks market their shows? Do you envision creating a section to highlight original programming within the Netflix service over time?

Reed Hastings – Netflix – CEO

The huge benefit is that we don’t have to advertise 8 PM on a Thursday night, tune in. We get to let people know about the show and they can watch it any time at their leisure. And so that lets us be much more efficient in our marketing and much less focused on a specific date and time. Mostly we’re going to be able to generate tremendous demand through our service, by targeting the specific online ads on the service, the content for the people who it will be relevant for. So we’ll get tremendous viewing from our 33 million mobile members.

Ellie Mertz – Netflix – VP Finance & IR

A few questions on competition. Do consumers need to choose between Netflix and, Inc. (NASDAQ:AMZN)? In the past you’ve referred to HBO and Netflix along the lines of baseball and football. Do you feel that way about, Inc. (NASDAQ:AMZN) too? As Netflix and, Inc. (NASDAQ:AMZN) both have exclusive content and original content, will it make sense for consumers to have both rather than choose between them? Do you think the two services will take on different identities and be the two leading visual cable networks for the future?

Reed Hastings – Netflix – CEO

Well some of this is already happening in the UK where LOVEFiLM, SKY, TV Now and Netflix have nearly no overlapping content. And the press tone is shifting in ways to getting both or getting all three as there are different channels, basically serving someone’s total needs. Of course, not everybody has infinite budgets. When anybody’s budget is tight. I do think that many people will choose multiple services, like we compete with HBO. Today in the United States, Amazon prime’s content has started to be mostly

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