Netflix has the most scale of any streaming service. They have the most subscribers, the most content, and the largest content budget. This scale advantage benefits their business in many ways.
Having the most users allows Netflix to buy content cheaper than their competitors on a per user basis. The cost of a new show gets spread over Netflix’s 139 million paying members while their competitors have to spread that same cost over a far smaller membership base. All things being equal, Netflix can pay more than their competitors for a piece of content and still get the same, or better, return on their investment.
Continue reading “Netflix: The Powerful Combination of Scale and Network Effects”
YouTube made an important announcement two weeks ago regarding how they are changing recommendations. In summary, YouTube is trying to protect us from our own cognitive biases. Unfortunately, humans are more likely to click on things that are sensational, negative, or fear-inducing.
To be fair, this didn’t start with the internet. For many years, the adage of news programs has been “if it bleeds, it leads.” Basically, news stories get better ratings talking about murder than about decreased childhood mortality.
Continue reading “YouTube Joins Facebook in Fight Against Human Biases”
My 2018 annual letter is linked below. Topics include:
- How I define a high-quality company
- A 4-page deep dive into Trupanion’s competitive advantages
- What led me to sell JD.com
Wiedower Capital 2018 Annual Shareholder Letter
In November, I spoke at a University of Texas MBA investing course. After introducing myself and my investing strategy, I spent the bulk of the presentation analyzing the competitive advantages of Amazon, Facebook, and Tesla. Specifically, I gave my opinion on how long-lasting each of their moats potentially is and tied that back into my long-term focus. Click below to view the presentation slides.
Finding Durable Moats is the Key to Finding Good Investments
Though not on purpose, Tesla has been on my mind a lot lately. Professionally, I’ve been researching self-driving cars and that involves reading up on Tesla (and Waymo and several others). The new book Autonomy is great by the way. And then personally, I just got a new car and thus spent the past several weeks going through the car buying process.
I hate everything about the car buying process and I don’t think I’m alone in that. Every friend I’ve talked to recently about buying cars has said the same thing. I started by entering my information into a few automaker websites to learn more. I immediately regretted that decision. The next few days I was bombarded by calls, texts and emails from salespeople at nearby dealerships.
Continue reading “Tesla and Product-Market Fit”
Two weeks ago I gave a presentation on Trupanion at the Value Investing Seminar in Italy. The presentation is brief for two reasons:
- I only had 20-minutes to present.
- I don’t like reading slides when presenting (kind of defeats the point of presenting), so most slides contain high-level thoughts that were explained more in-depth by me.
I wish I would have had 30-40 minutes to present. That way I could have done a deeper dive into the business. Nonetheless, I think some readers will get value out of it. Click below to view the presentation.
TRUP Presentation – VIS 2018 – Travis Wiedower
My 2018 interim letter is linked below. Topics include:
- My evolution to focusing exclusively on compounders
- JD.com investment thesis
- Four significant changes to Wiedower Capital to help align my investment strategy with my partners and my own pay structure
Wiedower Capital 2018 Interim Shareholder Letter