But some other analysts actually upgrading the stock off of the bad news that people say is bad, the subscriber count down, but noting that you still had solid churn. That was down, and you got a pretty strong financial position here when we think about the net income of $1.7 billion, more than double what Netflix had a year ago.

TUNA AMOBI: Absolutely. Good morning, Zack and Akiko. No, first off, I think there is no sugarcoating the fact that the mess was absolutely-- I think stunning would be a good word. I think both on the quarter, on the Q1 as well as the Q2 guidance, which was extremely underwhelming. Now, that being said, we now go into the quarter that expectations were relatively tempered, partly because of the pull-forward impact that you guys have spoken to.

I mean, no one really knew the order of magnitude, but if you take a step back and remember that they added 26 million subscribers in Q1 in the first half of last year, 37 million for the entire year, those numbers are eye popping by any measure. So there were going to be comping against these huge numbers. And also, the fact that the production was shut down, as you know, because of COVID-19, and they are starting to get back into that.

So the content state was fairly light, which got pushed back, a lot of the popular return is shown in the second half. With that being said, I think the way I would think about this is there is really no structural changes that have happened to derail the secular trend of transitioning from linear television to internet television of which Netflix is a main beneficiary.

Akiko, one more point on issue of competition, we were comforted by the fact that if you look at the subscriber base, it wasn't really concentrated in any one region, even in international markets where the competition is fairly light, they still had huge misses tells us that to Akiko's point and respectfully, we don't think it's a new normal. This is another speed bump. If you followed Netflix for any reasonable length of time, you know that there are speed bumps that they have been able to navigate, and on the other side of this pandemic, we still believe that they will be one of the winners of the streaming war.

AKIKO FUJITA: So Tuna, how should we be looking at the subscriber number in relation to Netflix as competitors? There's a lot of investors who are looking at these other names saying, is there a dip likely to come on the other end too, or is this a Netflix-specific story?

TUNA AMOBI: Great question. I don't think it's Netflix specific. If you look at all of the major streaming launches in the last year and a half, when this treatment war really intensified following the launch of Disney+, and then you have HBO Max and Picard, Discovery Plus, and most recently, Paramount, virtually, all of these guys have exceeded expectations, getting out of the gate. It's been very fortunate for them to launch quite in the middle of the pandemic, and you've seen that acceleration.

So to your point, I do believe this is a case of the rising tide really lifting a lot of these boats, and as we think the next three to five years and where various international markets still are relatively under penetrated, as much as they're still going through the vaccine struggles and distribution. And on the other side, we still believe the runway still significant for most of these platforms to continue to ramp up successfully internationally.

So in effect, we think the pie has been enlarged, accelerated by the pandemic, the secular trends. So I do believe, to your question, that ultimately, we're going to have some shake out, but that's probably not going to happen before the next three to five years, I would say.

ZACK GUZMAN: Yeah, I guess there's one thing to point to too. I mean, we talk about competition so much that, of course, it boils down to two things, A, how much can you charge. You might think that it might impact pricing, but then also, how much are you going to spend on the one thing that Netflix admits you gotta do, which is deliver content that people actually want to watch. And in that regard, they spent more and they plan to spend more. That's something we've noted before.

$14.8 billion in 2019, it was down at $12.5 billion last year due to the pandemic production. This year, they plan to spend $17 billion on programming, but at the same time, generating for this quarter a cash flow of $692 million. So talk to me about where you put Netflix right now in its stage of spending more as we come out of this pandemic on production to make sure they can still effectively deliver content at a price that makes sense for consumers.

TUNA AMOBI: Well, as far as spending on content goes, we don't think this arms race is going to abate any time soon, not with the likes of Disney, for example, looking to quadruple its own spending from $2 billion to about $8 billion next few years, a similar situation with others like HBO Max and Peacock and Discovery. So if you're Netflix, you've got to look over your shoulder and see that these guys are coming.

And content remains the single most important driver of consumer engagement. We just saw Netflix allude to the fact that their viewership, even in this last quarter was up year over year per household. Churn was down, and I thought it would stop me when they said that churn even with this price increase, Zack, they just implemented a Churn was actually still way below pre-pandemic levels, even for Q1.

So you've got to look at that and have a good feeling that there's still a fair amount of pricing power in the Model. So that being said, I do believe that they have some justification to ramp up their content spending. They just locked in this first run deal with Sony, reportedly worth a billion. And then also this deal for "Knives Out" equals that they're paying about $450 million for two sequels.

So Net, I think, as the competition has become more of a factor and looming large, Netflix has become much more pragmatic in their content spending, especially the original content, and you could argue that the return on those investments, whether subjectively with the Oscar nominations that you just saw, the creative acclaim. And then also, remember, arguably, the most importantly, inflection to positive free cash flow. Talk about break even free cash flow, which was reaffirmed and also now set to accelerate north of $1 billion thereafter per year.

AKIKO FUJITA: Tuna, really quickly, a question that seems to come up every quarter is this crack down on password sharing. Ray Hastings was asked about that yesterday. He seemed to play that delicately saying, it just has to make sense. Even though they've tested out something, they test out a lot of things. How realistic do you think that is? Is there a crackdown coming, or do you think Netflix has tried, tested the waters, and they simply don't think it makes sense right now?

TUNA AMOBI: Indeed. I think they danced around that question in circles yesterday. They tried to downplay it. My sense is that-- and we've always believed that the numbers of users who are not subscribers are not insignificant. And I do believe that there's probably going to be some upside in there. They're just trying to convey the message. They try to manage it delicately just to make sure it doesn't have any major fallout in certain markets where you've got maybe communal sharing.

But Net, I think that's something they've got their eyes focused on and something we believe will take some time to work through and potentially, create incremental revenue opportunity.

ZACK GUZMAN: All right CFRA analyst, Tuna Amobi, always love having you on to share your take. Appreciate you taking the time.