Oh wtf?! Is this one of the greatest bubbles in the history? Or is it still a good buy? The stock is going up like nobody’s business.
Owned it for a while, tempted to see but think there is more in the name. It is an adoption story. People who did not want to deal with the mail order (I was one of them) would pay for the service when you can stream instantly online. Also, just started offering the service on teh Wii which will broaden the the potential client base out to people who are not hardcore gamers (xBox) or who do not have the technical savvy to hook a PC up to their TV. I actually parallel the story to ISRG in that it is a matter of technological adoption. The product is superior, has limited competition and is reasonable priced considering the savings. It is just a matter of people catching on.
Netflix is killing it. They just added another 1.7MM subscribers. It’s cheap, ~$9/month. I could spend that much in one trip to BlockBuster. NetFlix was always going to be in the on-demand movie/tv business. I can’t really offer an opinion on their current value but I think they still have a lot of room to go. The bricks and mortar movie business is done.
Probably a great investment but… I think I’m the only person in the world that can’t stand netflix. My spontaneous personality doesn’t like waiting 2 business days for a movie I want to watch tonight. And they still can’t stream 1080p or 5.1 surround (their current encoding is already a bit weak)…which is important for the audio/videophile such as myself. But of course I’m in the minority…most people these days seem content with watching movies on their apple laptop and earbuds.
Theres Red Box. But Red box has some crappy selections…
Will anybody still be using Netflix 10 years from now? Five years from now? How will Netflix be able to keep its competitive advantage once mail delivery is no longer a selling point? In five years everything will probably be available via streaming from multiple providers.
gamblingeconomist Wrote: ------------------------------------------------------- > In five years everything will probably be available via > streaming from multiple providers. Perhaps, but there is a first mover advantage I would say. Online streaming may see more competition eventually, but I think the ease and quality compared to the cost of Netflix makes for a pretty durable advantage, assuming high quality movies remain difficult to get without studio licensing. I do think the mail order will become less popular, but they bundle that with the online streaming now (have done it for a year or two) so that is kind of a moot point.
Some of my students presented NetFlix for their project. I was pretty impressed by it. The main risk seems to be increasing competition for internet delivery. They do have excellent brand recognition which helps protect profit margins. In a strange way, Blockbuster’s brand recognition is a hindrance to Blockbuster, because the brand connotes brick-and-morter. I forget the details of what my students concluded, other than the fact that they liked NetFlix. I would want to see what portion of the stock price is predicated on growth vs the current franchise value of the business. If the growth component of the stock is low enough, I’d buy it.
Yeah the future is the streaming internet. They have an advantage that they’ll get people “used” to the monthly payment, so that when they naturally transition to watching more content online vs. through the mail they’ll barely notice it – but they’ll keep paying. I can see Netflix transitioning into a larger online content delivery system – that speculation as Netflix being the major portal is probably what is driving its multiple so high.
The future is not streaming internet, its here now. If your a geek, and are a member of a private torrent board or newsgroup. You can download pretty much anything at 1mb/s. If a DVD is 4.7gb I can download 1mb/s it takes me about 90 mins. That means even if you want a 1080p version of the watchen it could take 3 hours max. These services are available in the underground right now. Now if you can go get the bittorent guy hire him and get the MPAA on board. You have the real “first mover advantage”.
adehbone Wrote: ------------------------------------------------------- > The future is not streaming internet, its here > now. If your a geek, and are a member of a private > torrent board or newsgroup. You can download > pretty much anything at 1mb/s. If a DVD is 4.7gb I > can download 1mb/s it takes me about 90 mins. > > That means even if you want a 1080p version of the > watchen it could take 3 hours max. These services > are available in the underground right now. > > Now if you can go get the bittorent guy hire him > and get the MPAA on board. You have the real > “first mover advantage”. Yes, I am aware that you can torrent practically anything. There are two differentiators, the first one bigger, with regard to Netflix: 1) Torrenting is not instant. In american TV/movie watching culture instant gratification is very important. I torrent books, music and movies I cannot get on Netflix. However, I believe it is worth it to most people to pay $7/mo to be able to watch a substantial (and growing) library of movies and TV shows instantly. There are some black market instant streaming sites, but the quality is hit or miss and the interface is annoying. 2) Torrenting is illegal. I know there are questions as to how much this matters (look at the music industry), but it does create something of a barrier. I actually think that Netflix is on a good trajectory from a subscriber standpoint. The bigger question is will the studios start beating them up on fees for streaming content which will either eat into margins or for prices higher. They have a contract with Starz (probably their most popular content provider as of now) coming up in 2012 so we’ll see. The just signed HBO too, although I am not sure as to the extent of the contract off hand.