High Noon for Netflix

But if Netflix is able to dodge for a while the obstacles of postal rates, marketing costs and Blockbuster, its biggest concern could very well turn out to be the company's own shortsighted policy of delaying shipments to subscribers whom it believes order too many DVDs in a month. That's punishing your most loyal customers -- a kind of slow but sure corporate suicide.

In order to stop alienating movie buffs, Netflix should consider revamping its pricing structure or -- much better -- making its operations even more efficient. A smart company would see the problem of frequent customer transactions as an invitation to innovate -- maybe overhauling the distribution structure or introducing a loyalty program like Amazon Prime.

That's the real cliffhanger for Netflix. Otherwise, it will watch its core audience drift away, and that would result in one of the unhappiest endings of all.

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