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Netflix, Inc. (NFLX) Message Board

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  • techstrategy techstrategy Jul 20, 2011 8:46 PM Flag

    Can any MORE Bad-News come out for NFLX this week ??

    This is the core of the licensing issue and the reason for the price increase. NFLX really only has 10MM or so active streamers. It doesn't want to pay the studios for 23 (or 30+ to account for future growth). So, while it is telling WS it has a fast growing profitable streaming business, it is telling the studios it only has say 10MM streaming customers. It cannot have it both ways. So, it had to take the risk of having people pay separately for streaming.

    I hope every customer drops streaming and goes to the 1 DVD plan. NFLX promised one day shipping. How many movies do you need at any 1 time? If they do, NFLX goes under. All of the physical costs remain. Revenues ARPU declines even further AND the growth lie is dead...

    Seriously though, NFLX isn't making money on its streaming, even with once in alifetime Starz deal. It is making money on DVDs and has attracted more customers from having the streaming offer. The great irony is that streaming will come to be known as NFLX's loss leader. Expansion to other countries without DVD will be its downfall...

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