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Netflix, Inc. (NFLX) Message Board

  • genetics4rfuture genetics4rfuture Sep 23, 2010 11:37 AM Flag

    SERIOUS QUESTION HERE?

    WHAT IS TO STOP THE NEW DEBT FREE OWNERS OF BLOCKBUSTER FROM JUST COPYING EXACTLY NETFLIX's BUSINESS MODEL but simply also using Blockbuster's much greater new releases exposure and blueray exposure to provide a better product than netflix.

    Seems so easy for Blockbuster to simply open up their entire movie catalog to streaming Wii, XBOX, APPLETV and PS3 users just like netflix has. $9.99/mo but much better movies.

    There is zero market protection for netflix's model.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • If they could have done that, then they would have done it.

      Why didn't they do it long ago when Netflix did? How has their debt been stopping them? How did Netflix manage it when they first started out and why didn't Blockbuster do so?

      This is like asking why Microsoft or HP or Nokia or Motorola did not invent the iPhone or the iPad.

      Maybe the answer is that Netflix is a better company and the people running Blockbuster are losers. It has always been possible for Blockbuster to do what Netflix has done and, in theory, take advantage of its superior position as the established dominant player.

      But Blockbuster was never able to do so and now, after several years, they are not so dominant and are playing catch-up in many respects.

      Do you think going through bankruptcy will turn a loser company into a winner?

      That said, I think the P/E on NFLX is insane based on its likely future EPS. I don't understand these price levels, but I'm not bashing. Good for them. They are an innovative company and I applaud their success.

      Blockbuster has not been an innovative company for well over a decade if it ever was. Even when they started out, renting video tapes was a well-established model. So they just made that into a national chain.

      Netflix innovated the delivery of DVDs by mail and providing streaming online access to their library.

      Meanwhile Blockbuster sat by and became more and more obsolete. Getting rid of their debt won't change that and it won't change the character of the company. They are losers.

      And finally, a bankruptcy court is not Santa Clause and creditors are not going to sit by and get screwed. Blockbuster will be not be magically relieved of all its debt. The court will permit as much debt relief as it believes is necessary to try to save the company and creditors will be given as much interest as possible in the new Blockbuster as a matter of fairness. If Blockbuster has non-core or non-essential assets that can be sold-off for a decent price, it will likely be forced to do so in order to pay creditors.

      By the way, I don't own a single share of NFLX. My money is tied-up in AAPL and I'm in a pretty good mood.

      • 1 Reply to gulc94
      • NFLX signed an agreement with the various studios to NOT release videos before a set period of time. BB would not be able to release their fresh videos because the studios would shut them down. The studios count on new CD sales and that happens in the first 1-2 weeks post-release. They do not want CSTR or NFLX to have those new releases super easy to get to because that removes the customer need and desire to buy them.

        NLFX decided to play nicey-nice with the studios so as to not peez them off. BB cannot just release everything without the studios allowing them to.

    • Google. Expect close to zero margin when Google makes their deal with Hollywood. Google simply wants traffic.

    • Simple....business model is nearly impossible to duplicate and it takes a huge amount of time

      nflx has the efficient process to keep the cost down

      library
      technology
      agreements with partners
      low g&a costs
      steamliine billing
      user friendly interface
      high customer satisfaction
      expansion
      integration with partners

    • Best point on this board.. Yes, I agree that will happen. They will be lean and meaner. Blockbuster with cash and new releases off like they have the rights to. Short 160.85

 
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