This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Can Netflix Stay Afloat?

It was just a matter of time before people started questioning their own logic of not using it. It no longer made sense to drive to a Blockbuster, stand in line, search through its entire collection, and then have to deal with late fees. Blockbuster, the once-hot spot for Friday nights, became old overnight. Netflix took over the market -- both the movie industry and Wall Street.

The Empires Strike Back

However, with such exceptional growth, comes a lot of attention. Netflix started to get a lot of it not only from Amazon (AMZN), which recently launched a competing service called Prime.

Also, members of the cable industry started to wonder about their own futures -- namely Time Warner (TWX) and Comcast (CMCSA).

The first evidence of this concern came when Time Warner's HBO unveiled its now-widely popular HBOGo Internet streaming service. Subscribers of HBO are now able to access all of its on-demand content online, free of charge. Though HBO says it has not plans of making this service available to non-subscribers, its ease of use as well as interface is arguably equal to or better than Netflix's.

Also showing some concern was Comcast. In February, the cable giant announced its plans to go toe-to-toe with Netflix with its own Internet movie streaming service called Xfinity Streampix, one that will offer a library of TV shows and movies.

As with HBO, the service will be made available only to its current subscribers. However, the difference is that unlike HBO, under programming agreements, Streampix can also operate as a standalone service outside of the cable subscription package.

As with RIM, Netflix is started to feel the pressure that comes with being a market leader.

The Netflix Channel

However, unlike RIM, it seems Netflix is willing to make the necessary adjustments. Where it can be argued RIM dominated the enterprise at the expense of sacrificing the wants and needs of consumers -- which ultimately led to Apple's dominance -- Netflix is demonstrating that it will leave no stone unturned to maintain its market share, even if it means sharing (literally).

In a stunning move, Netflix CEO Reed Hastings has decided to "think inside the box." The company has had discussions with some of the largest cable operators and appears to want the company to have its own channel on their cable offerings. The idea is that Netflix would become available as another on-demand option for cable subscribers through their set-top boxes.

Netflix essentially wants to pay cable companies just for the opportunity to compete with their own premium movie channels including Showtime, Starz and HBO. If this works, the cable companies would receive a subsidy for offering Netflix as an additional option added to a customer's cable bill.
2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
NFLX $125.44 0.00%
AAPL $117.81 0.00%
FB $105.45 0.00%
GOOG $750.26 0.00%
TSLA $231.61 0.00%


Chart of I:DJI
DOW 17,798.49 -14.90 -0.08%
S&P 500 2,090.11 +1.24 0.06%
NASDAQ 5,127.5250 +11.3820 0.22%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs