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Posted by rsarda1 (on March 20, 2012)
I think NFLX is slowly passing away. Having very little of the new release inventory, and growing competition from "pay as you go" - VUDU, AMAZON and Dish network's BLOCKBUSTER, Red Box kiosks, and the build in rental services on the Xbox and PS3 - not to mention channels on line like HD HBO, Cinemax, etc....
Maybe DVD rental work in India or China, or the rest of the world, but in USA, with increase of cheap bandwidth streaming is the name of the game. And all of the above services offer much better selection of more recent titles.
NFLX is out of the league of all other companies because it dose not have the capital (not tens of millions, but hundred of millions) of dollars to secure distribution right of the content. That is why they needed to increase their pricing scheme. In other words their competitive moat has been penetrated from several directions, by several attackers.
Note: APPL is about to enter that moat with new content acquisition and its new APPL TV. Did I mention how many Billions APPL has? Fair well NFLX, was fun while it lasted....
Posted by Yoseph (on March 21, 2012)
The biggest thing that really bothers me about Netflix is the mismanagement around stock buybacks. In 2010 and 2011, they spent around $400 million on stock buybacks while the stock was at stratospheric levels. Management was playing the game to bump up stock prices and line their pockets.
It's put them in a terrible position now that, as you said, competition is coming from everywhere and content costs are increasing substantially.
Posted by ValueDave (on March 18, 2012)
Increasing costs. Increasing competition. Increasing risk. This for some reason is resulting in an increasing stock price. It’s crazy.
Posted by dgreene (on March 19, 2012)
Agreed. THey lost the Starz deal, are spending $500 million this year on “original content”, Wal-Mart and Amazon are flanking them left and right, they’re expecting a loss this year and margins are getting squeezed because content is getting more expensive. I’d short this thing if I didn’t think I’d get screwed by speculators.
Posted by formerhedgie (on March 19, 2012)
Look at the Revenue growth. People are underestimating management. They’re going to take this thing much higher. They just launched in the UK and will continue to grow internationally.
Posted by bojangle (on October 3, 2013)
This stock is just going up on hype. Given the new investments into the company over the past year, there was marginal growth in revenue and income. The company has potential, but the rise has been way too quick and the price is WAY too high to be worth it right now. I'd buy it around $50, not a dollar higher.
Posted by grafxone (on March 27, 2012)
An impending concern is bandwidth caps. Physical media is dead, and 30% of internet bandwidth is being taken up from Netflix. Comcast is a provider who currently has monthly bandwidth/data transfer caps. What happens when they stick it to NFLX and lower the cap, and say, "ALL movies from OUR onDemand service, will not count against your cap"? Phase 1 of 2... Done...
Comcast Movies don't count against you...
(Amazon currently does this with their Music service.)
Are bandwidth tiers/plans next, like smartphones? Just one other obstacle to think about besides the obvious AMZN and AAPL competition.
I am still waiting for Apple to acquire.
Posted by Scudy (on January 19, 2013)
Personally, I doubt any company will be acquiring Netflix. It's now 2013, Netflix is steamrolling through original content in a spearheaded manner, unlike CBS, FOX, and ABC's approaches in vomiting on the wall, and seeing what sticks. As of now, the competitors Netflix faces haven't been nearly as aggressive in their endeavors, thus Netflix has just reinforced its dominance by expanding into multiple countries around the world.