Michael Burry of 'The Big Short' Bears on Netflix: Calls Disney 'Wine,' Netflix 'Milk'

Michael Burry, the investor immortalized in the film 'The Big Short,' recently shared a sharp analogy in his personal Substack column, drawing a fundamental distinction between two global media giants: Disney (DIS-US) and Netflix (NFLX-US). 'Disney is making wine,' he stated, 'Netflix is producing milk.'

According to a report by 'Business Insider,' Burry wrote in a recent post that wine 'gets better with age and may even appreciate in value over time,' whereas milk 'is usable now but will absolutely not withstand the test of time.'

He believes that classic franchises under Disney, such as 'Star Wars,' 'The Avengers,' 'Toy Story,' and 'Moana,' possess far greater rewatchability than Netflix hits like 'Stranger Things,' 'Squid Game,' and 'K-Pop Hunters.'

Burry admitted he routinely applies a 'long-tail test' to evaluate Netflix's content quality—assessing whether its productions have the enduring appeal to be watched repeatedly across generations.

He pointed out that Disney and its Pixar Animation Studios, as well as Warner Bros.' 'Harry Potter' series, have passed this test. In contrast, with the exception of 'Suits,' which briefly went viral on social media, 'none of Netflix’s other content has ever given me a sense of lasting value,' he emphasized. Moreover, he noted that most of the benefits from 'Suits' popularity flowed back to the original creators, not to the Netflix platform itself.

The root of this content disparity lies in the two companies' differing business models. Disney has long excelled at building powerful IPs; once a hit like 'Frozen' emerges, it monetizes it across films, TV series, theme parks, resorts, cruises, merchandise, and even video games.

In contrast, Netflix’s core business remains focused on the streaming platform itself, with a content mix of original productions and licensed titles.

Burry further described Netflix as 'a participant in an increasingly fierce and highly fragmented streaming battleground.'

Even though Netflix’s stock has sharply declined from its summer 2023 high of over $130 to close at $67.60 on Monday (20th), a nearly 50% drop from its peak, Burry still does not see it as a buying opportunity.

In fact, Netflix’s recent financial reports have continued to face pressure, with both revenue and subscriber growth slowing. Intense market competition is challenging the company in acquiring new users, retaining existing ones, and maintaining profitability.

Burry had actually predicted this earlier. Back in April 2022, when Netflix experienced its first subscriber decline in over a decade, he publicly stated on social media that 'Netflix is facing real competition.'