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Author: TMFJMo Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 1388  
Subject: I Know A Lot Of You Like Netflix Date: 9/8/2012 9:58 PM
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Now I will preface this by saying that I am not a Netflix hater by any stretch. I am simply one Fool that falls on the bearish side where Netflix as an investment is concerned. Put succinctly, I think that Netflix at this point is a better service than it is an investment. And I think it is a fine service for what Reed Hastings has set out to do.

Netflix's competitive advantage was never stronger when it was strictly DVD by mail. They owned that space and to be sure that's the primary reason Hastings started the company; to eliminate the dreaded late fees. However streaming is a totally new ballgame and one that brings in many new players. Netflix's competitive advantage in this space was its first-mover status when streaming was still a novel concept. It is no longer a novel concept and this first-mover advantage has diminished substantially.

I encourage you to check this link here. It's a nice video clip reviewing the new Amazon Kindle Fire HD:

http://www.theverge.com/2012/9/6/3295919/amazons-8-9-inch-ki...

I also encourage you to check this link here. It's a review of Amazon's presentation as Bezos introduced the new lineup a couple of days ago:

http://www.theverge.com/2012/9/7/3298382/amazon-kindle-fire-...

As a consumer who used to subscribe to Netflix and is also an Amazon Prime member, it's quite obvious to me the ramifications of this new line of tablets. Given the state of Amazon's streaming library to date, the fact that it continues to only grow and get better, extending to more and more platforms, competition in the streaming space is getting ready to hit a whole new level. Bezos is building the Kindle Fire family to stay; it's not a gadget, but a service (his words). In short, he wants the content you are watching to come from Amazon. It doesn't take a genius to see that.

Don't get me wrong, I'm not saying that Netflix won't succeed; it very well may and I think will...to a degree. While I don't own and have never owned Netflix stock (I do own shares of Amazon), I would never bet against Reed Hastings. Blunders aside he's quite obviously a very bright guy. I am saying however that the competitive landscape in this space has changed very significantly in a relatively short amount of time. One of the biggest competitve advantages in this space today is deep pockets and some are deeper than others. Just something to think about.

Foolish best,

Jason
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Author: JiminyBillyBob Three stars, 500 posts Old School Fool SC1 Red Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1222 of 1388
Subject: Re: I Know A Lot Of You Like Netflix Date: 9/9/2012 7:19 AM
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Jason, I'm in agreement with you on NFLX. I use the service, but as the situation currently stands, I won't be investing in NFLX again until I see a more advantageous position for the company. I liked how Jeff Fischer put it one of the podcasts...that its business model is worrisome in that the more subscribers it services, the higher the cost that the content producers expect to be paid (or something like that). Please correct me if I'm wrong. Like you, I wouldn't short the stock, either, especially with the possiblity of a buyout.

Not to go off tangent too much from the theme of your post, but these days I'm looking hard at MNST with its recent drop.

Actually, that was really off tangent.

Carl

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