The Rise and Fall of Netflix: Will it Rise Again?

Filed in Uncategorized by on December 13, 2010 0 Comments

Netflix, the company that popularized postal disbursement of movie DVDs, and the company that recently branched into streaming media, had an stellar year in place according to a report on Forbes.com.  With a year-to-date tripling of its stock price, the stock reached a high on November 30 of $205.90 per share price. Deals with content providers such as Disney ABC will expand Netflix’s feature film and TV show library. To cap it off, just last week, it was inducted into the illustrious S&P 500.

Things were going well, it seemed, for Netflix.  Then, as happens in the best suspense stories, the protagonist flounders, and indeed, Netflix’s stock has fallen.

Angst over the potential of increased competition and rising costs triggered investors to divest their portfolios of the stock. In addition, because of its growth, Netflix is competing against tougher adversaries, which is causing other analysts consternation, and amplifying cost pressures. Comcast, for example, is hoping to become a majority stakeholder in NBC Universal. Comcast may restrict content to protect its business, and so raise costs for Netflix. Netflix will also be going up against the “TV” systems of Google and Apple; both companies have the cash to wage battle against Netflix.

However, in the best suspense stories, the protagonist falls, battles mightily and rises again. What do you think? Will Netflix rise again or will it fade into oblivion?

Photo by Bryan Gosline at flickr.com.

 

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