is it really worth celebrating?

Netflix Inc (NASDAQ: NFLX) is up 7.0% this morning after the streaming giant said it lost nearly half as many subscribers in its recent fiscal quarter as the Street had forecast.

But is it really stock market news that deserves to be celebrated this much?

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Tom Rogers shares his two cents

According to Tom Rogers – Executive Chairman at Engine Media – not quite; since subscriber growth is not the “fundamental” challenge for Netflix. It’s monetisation. On CNBC’s “Squawk Box”, he said:

Netflix doesn’t have a subscriber issue. Their overwhelming issue is how do they monetise what’s an amazing distribution base.

Granted that Netflix is starting to crackdown on password sharing and recently partnered with Microsoft to soon launch a cheaper, ad-supported subscription plan. But all of that will sure take some time to turn the needle for it.

Theoretically, the mess could have been avoided if Netflix hadn’t inflicted this pain on itself. The digital media mogul noted:

I continue to think they’re in a league of their own. But I just don’t understand how such a well-managed company could let one-third of its audience become non-paying.

Q2 was neutral for Netflix at best

To that end, the second quarter report, as Rogers put it, wasn’t a “definitive” one for the media company. Sure, it was a positive for the “bulls” that fewer-than-expected subscribers said their goodbyes to Netflix, but it still lost nearly half a million of them, so there you go “bears”.

Unless they deal with the monetisation issue, whether they add a million in a quarter or lose a million in a quarter, it really doesn’t go to the value.

Simply put, results last night were hardly an “all clear” for Netflix. So, move with caution seems like a better call. Year-to-date, the stock that trades at a PE multiple of 19 is still down nearly 65%.