I wasn't too concerned with Blockbuster or Wal-Mart competition. The biggest concern was the summer!
This is normally Netflix's slow season and for them to still show 9% growth is very good. Next Qtr show be slightly better or even with the real growth in Q4 and Q1FY04.
What will really be outstanding is the profitability numbers announced July 17th.
As a holder of this stock I am very pleased that the company is executing well.
Personally I think the stock will head up and then strongly down based upon past experience with the emotions of shorts (and longs) on this board.
A lot of speculation on this board about other opportunities. Having grown up in Canada..let me say that its possible to have this service there. Local companies already exist. But its hard to make as much money on the service due to more alternative competitors (video vending machines at local corner store), poor postal service (Canada Post; yuch... they have stopped home delivery a while ago, take 3-5 days to deliver letters that are delivered in the US in 2-3 days and charge much more for postage) and the additional costs for dealing with the language issues for a relatively small market.
Regionalization of DVD's is strictly based on purchasing power of the population. Spend a moment and look at the map and you'll see the pattern emerge. This is actually a good thing.
Let me explain by showing the problem with CD's: US market has historically been priced between $12-15 per title. If labels released the same title in a country with substantially lower purchasing power at the same price point. You guessed it, there won't be any sales. If they turn around and price it for local purchasing power, 3 days later these will show up in US market as gray goods.
DVD regionalization is a solution to this problem allowing studios to price the same product differently and still protect their juicy US market.
the other thing they might do is convince the studios to press them non-region-encoded dvds, which would play anywhere. But somehow I doubt this would go over.
The regional thing is completely an artifice of the studios, to allow them to stagger the release dates of films around the world, to squeeze the most from each run. Apparently a big part of it is the actual cost of printing and shipping the films around the world, but part of it is marketing optimization. If they manage to convert a big portion of theaters to DLP from film, things might change, but that's years away.
Why is it discouraging?
They have rev share agreements with the studios, the studios will provide which ever region dvd NFLX needs. So the availability will be slightly different, but everything else can remain the same.
But sure, Canada first, then worry about the rest of the world.
in addition to figuring out the postage differences. they'd have to have separate dvd inventories for each global region, since dvd players won't play out-of-region discs. Canada's easy, the rest are harder. here's the map: