Company's stock soared yesterday, reaching record heights over $390 in extended trading yesterday and started a sharp decline today. That happened after the CEO, Reed Hastings warned of investors' euphoria around the stock.
As we analyze the IT disruption and new trends in Media industry, it is interesting to dig deeper into the success and possible issues for Netflix. This Bloomberg article elaborates more on how is Netflix passing HBO in US customer-base.
One of the most important contributors is creation of original content by Netflix. Emmy-winning 'House of Cards' helped the company to increase customer base by more than a million users.
In addition to that, Netflix is considering deals with cable companies such as Comcast to include their service on set-top boxes. Analysts argue on the possible outcomes.
What are your thoughts on the future of Netflix? What major risks do you see?
The Netflix model of content delivery will only increase as regulations evolve to reflect the increasing on-demand, binge watching habits. Canada has recently announce that they will mandate that cable providers allow consumers to purchase a la carte cable packages. With the disruption of the cable companies traditional bundling revenue model, content providers like HBO my take this opportunity to expand their subscription to a Netflix type model. Netflix will have to leverage their in-depth knowledge of viewer preferences and make a more aggressive move in the content creation side of their business as competition of on-demand content increases.
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