My prediction for the next qtr's report is that the company will either miss the # of subscribers or the profit or both. With all the new competition, it has to hit somewhere. I wonder if amazon will join the game as well.
Amazon is my biggest fear of competition for NFLX, if they were getting into the market I'm not sure I'd stay long. Online DvD rental business is about two core competencies:
1) Technology 2) Nationwide distribution capabilities for next day delivery
Neither WMT nor BBI have core competencies in those areas, though they're trying to build them up. (1) Amazon however has many years of handling both those core competencies. My hope would be that if Amazon wanted to enter they'd go for a buyout and look to the one that has the patents.
>But all your short sellers out there, just >remember: there are NO BARRIERS to entry in >this business.
There are barriers, but Amazon would blow through them in a heart beat.
(1) WMT has an awesome distribution system for retail store products, don't get me wrong, but it doesn't apply to this model. The distribution here is centralized DC's sending out through the postal system products around the country, not in bulk to stores.
You are correct, they should report blockbuster numbers and have a great 4th quarter. Based on their last earnings, they are signing up customers in record numbers and that should continue through the holidays.