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Netflix, Inc. Message Board

  • lindawee37 lindawee37 Feb 7, 2012 7:19 PM Flag

    $120 in a hurry based on

    today's action plus competition in the same space is getting very furious...

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    • Really no one out there now who can compete with netflix world wide.Maybe in future but at moment they got the best service avaible. I see thousands cd,s for netflix going threw mail service. Almost one of biggest deliverys mail man makes now

      • 2 Replies to jerr169e
      • Netflix has barely begun to build its streaming business and brand internationally. In contrast, Amazon, Apple, Google, among others with intentions in this space, already have massive global brands and more existing subscribers internationally than Netflix will ever have. Marketing and subscriber acquisition costs for them will be a fraction of what Netflix has to spend.

        Netflix's DVD by mail business is fast disappearing. They are losing DVD rental subscribers faster than they are gaining streaming subs - much faster.

        Netflix's management has acknowledged that they will continue to invest all of their US operating income into growing their international markets, where they are building from scratch without the DVD rental jump start they had in the US. However, their ability to make the international markets pay off is unproven. Their costs to date to acquire overseas subscribers show that they will break even only after an average of 18 months' subscriber retention. There is no evidence that they can achieve this, even here in the US. In the meantime, for an indefinite period, Netflix will not be profitable.

        Worse, Netflix is taking on medium term content liabilities faster than it can earn gross margin. The content assets represented by these liabilities cannot be monetized except by incremental subscription growth, which continues to fall short. Netflix is fast running out of capital.

        Netflix has had a brief head start during which it has not had to face the headwinds of serious competition in streaming, but that situation is changing rapidly. The coming competitors are monster global names with deep pockets and numerous other lines of business to fund streaming as a loss leader for as long as it takes to bury Netflix with price competition. The future for an under-capitalized upstart niche player like Netflix is bleak.

      • Remember this my friends Wall Street looks ahead and what they see will be reflected in NFLX price going forward and what they see is stiff competition with slower growth which spells much lower prices for everyone.

 
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