Netflix: The Biggest Empty Promise Since Enron?

NEW YORK ( TheStreet) -- I don't think Reed Hastings thinks he's running a scam at Netflix ( NFLX). In fact, I consider Hastings a relatively well-intentioned guy who truly believes he holds the key to the future of -- for want of a less anachronistic term -- "television."

And, to a certain extent, he's got something with Netflix. Whether he actually conceived it or not, the whole DVD-by-mail thing was genius. He killed that, albeit prematurely, and gets 30 million or so subscribers to drop $8 a month for a limited slate of second-run (and beyond) TV shows and movies as well as a skimpy original programming schedule. Quite a racket.

And there's NFLX the stock. It's up 277% since I suggested investors prepare to buy it before it rises from the dead last summer. After seeing the stock past $100 and $200, $300 a share by summer would not surprise me one bit.

That said, putting all your coins in NFLX might end up tantamount to loading your 401K with company stock like all those poor Enron employees did years ago. Enjoy the ride -- no doubt -- however do not get sucked into believing you have invested in a great company with a promising future. Define the term however you will, but, Netflix will end a "scam" in that, without more bailouts, it will be worth nothing because it never really had much of anything real or tangible outside of the red envelope.

In light of competing news stories from last week, let's consider the reality I will continue to hammer home, just as I did prior to 2011 NFLX implosion I predicted.

First, via Yahoo! Finance, comes word that Netflix has signed another deal with Disney ( DIS) that gives it access to kids' programming. This comes on the heels of what will go down as an anomaly and, quite possibly, a mistake by Disney to award Netflix "exclusive" first-run access to its movies come 2016.

Second, via Bloomberg, Disney's ABC Network plans a TV Everywhere app that will give pay-TV subscribers access to ABC programming.

Let's quickly and clearly make sense of this as it pertains to Netflix.

TV Everywhere, while still fragmented, continues to evolve. Make no mistake, TV Everywhere is not a scattered assortment of apps because old guard media executives are stupid. It is what it is because they're incredibly smart. They just don't run around telling everybody how smart they are like the Netflix CEO does.

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