Netflix: Not Feeling Lucky Anymore
Earlier this year I bought some Netflix stock in the low $200s. Which looked like a smart idea when it neared $300. But even when I wrote that “feeling lucky” post I threw in some cautious words about selling the stock to lock in the gains.
Well – should have sold when I had the chance. Following the price increase and lowered content offerings, they’re losing subscribers, and the stock has plunged beneath $200. And am thankful I didn’t buy more. And it’s not without reason; Netflix has made some uncharacteristic mistakes over the past few months, that I wrote about at the time:
- Awkward redesign.
- Loss of Starz, Sony content.
- The decision to separate streaming and disc rentals into two separate plans, resulting in big monthly increase for customers that wanted to retain both. And with the streaming service losing content, the end result is paying more for less. I don’t know any customer of any service that enjoys that situation.
- The price increase was mismanaged from a customer service standpoint, hurting Netflix’s previously shining image and brand.
Anyhow, at this juncture, Netflix no longer looks the most likely company to provide my long hoped for “video nirvana.” Hulu might make it happen, but it’s worthwhile noting how individual studios and channels seem to have finally caught on to streaming video over the Internet, via their own websites and iOS apps. So we have NBC, ABC, PBS, Crackle, etc. apps streaming entire episodes with commercials, or the HBO Go iPad app that serves up content to those with an HBO cable subscription. Then add in streaming said content to an Apple TV (with screen mirroring between the iPad and Apple TV in the upcoming iOS5) and you have slightly kludgy but still, pretty compelling alternative to the one service to rule them all.
And in this future, Netflix looks less relevant. They’re nothing without content, and content owners may no longer need Netflix as a middleman.
Will stick with the Netflix subscription for now – but the stock smells like toast.