Netflix's market is for unlimited access to a library of TV programming, not pay-per-view. It is by far the cheapest option for subscribers who want access to a fairly complete library of TV programs. Nobody has a cheaper option, except for maybe Amazon Prime, if you subtract out the free shipping. But the programming in Amazon's package is extremely sparse. Netflix's closest competitor is Hulu, but Hulu's has huge gaps in content, and runs commercials. Nobody else will mount a serious challenge to Netflix based on its current results, because the only companies with that kind of money want to hold on to their high margins, not waste their capital on cloning Netflix's profitless operations.
Not only is Netflix a great bargain, but the very fact that all of the streaming options on the market are so low in cost to the consumer that the effect of the so-called "competition" will simply be that people will add one or two additional services to go with their Netflix, but not to replace their Netflix.
The more money it makes, the better. But in the short term, it doesn't really matter. What matters is that anyone who invests in the stock market should have NFLX long, just as they should have AAPL. These two behemoths rule. I suspect that for both companies, that time is coming to an end and its time to find the next enticing story, or growth stock.
What I don't understand is why bear articles that value the stock anywhere from $40 to $90 depending upon which article you read.No one seems to realize that this company has run huge negative cash flows, and then really small positive cash flow for a year or two and then there is another major investment. |
