The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.NEW YORK ( Trefis) -- While Netflix's ( NFLX) first-quarter 2012 earnings results were promising, the revenue outlook was weaker than consensus analyst estimates thus resulting in stock plunging. Nevertheless, the subscriber trends seem to have improved and the overall subscriber outlook for 2012 is better than previously estimated. The downside is that long-term subscriber expansion ability is in doubt and there is hardly any indication that Netflix's content costs will come down notably.
However, the expected drop that Netflix is forecasting seems to be relatively higher than what we have seen historically. Perhaps the churn is higher and getting incremental subscribers is getting little difficult for Netflix. The other reason could be that the initial subscribers who joined Netflix in the past few years are more entertainment savvy. The company is going to need to work a little harder on retaining newer subscribers who may not be as hooked to streaming as the early adopters.