... as the train pulls out of the station and I'm not on board.
Thankfully, I'm not one of the shorts being pulverized underneath the wheels.
You have to give credit to Reed Hastings and Ted Sarandos --- and never forget about Ted, he is instrumental --- for the Dreamworks deal. I looked at the backend 2012 original content slate, and didn't see anything truly riveting or must-see. $222 looked like a good exit point after the Arrested Development premiere.
"Every crowd has a silver lining." That's what P.T. Barnum said 150 years ago and it is still true today. By amassing a huge crowd for streaming content, Reed and Ted are magnets for artists and creative talent who want to have their creations seen by the widest possible audience.
Everyone should read the recent comments by Spielberg and Lucas about the difficulties facing Hollywood. They are predicting catastrophe and skyhigh price increases and maybe even variable pricing. DVD income is falling and it made up a great deal of the profit from a movie release. International sales now compose about two-thirds of a movie's revenue. As it is, the top 10% of the movies being released are responsible for 90% of the profit. The Batmans, The Supermans, The Twilights --- and everything else is slowly being pushed away as non-viable. Where does this non-viable content go? Where does the talent --- the directors, the actor, the screenwriters --- of this non-viable content go?
Yes but the reality is that the original programming is likely not a major component of Netflix's core performance (yet). That part of the investment thesis should be based on whether they can pull off an HBO-like original programming channel, not the short-term results. But really what dominates the investment thesis is their position as a new type of channel for content, their lead in that respect, and the quality of content they can deliver for 8$ (that content mostly being purchased rather than produced).