For the last few days, I've been reading reports on various websites about Netflix, and how the company is starting to show signs of weakness. On Yahoo especially, there have been more than a few reports talking about how Netflix did not beat the Wall Street expectations in the third quarter 2012, and how signs are showing that the streaming service is starting to fail.
Well, quite frankly, that's just a bunch of crap.
I've heard the same sentiments before. A few years ago, Blockbuster was supposed to be the ones that was coming to knock out Netflix once and for all. After all, Blockbuster had plenty of walk-in stores. Now, they were going to add a rent by mail service that was supposed to rival Netflix. The idea was that the one-two punch was going to deliver a knockout blow.
Well, that didn't happen. Instead, five years later, it's Blockbuster that has gone bye-bye. And Netflix? Well, their stock rose almost eightfold since those days.
But now, those same type of rumors, signaling the demise of Netflix are in the air again. Never mind the fact that they are still the number one online streaming service, the number one rent by mail service, and the most recognizable brand in both of those arenas. If you listen to the naysayers, it's time to start preparing the coffin for Netflix.
Yeah, yeah. Whatever you say.
Let me go on a rant for a few minutes, and tell you exactly why Netflix isn't going anywhere.
1. Netflix is still growing.
Users in the coming quarter. Netflix themselves came out and said that their subscriber base will only grow to about 200,000 more users in the next quarter. That's still more than the projected growth in revenues for other streaming services. Netflix actually added almost 2,000,000 more members since the beginning of the year. And as they state, quarter 2 has always been a slow period for Netflix growth.
The truth of the matter is, Netflix has experienced a 21% first-quarter revenue growth since last year.
2. The other streaming services suck.
Wal-Mart's going to try it again. This will be the third time Wal-Mart has tried to enter the arena of movie streaming. Did you know about it the first two times they tried? Probably not. And even though there may be one or two good movies available on demand through Wal-Mart's VUDU streaming service, it can't match Netflix. And why would you want to stream the newest movie for $3.99, when you can go down to your local Redbox and read it for only one dollar? It doesn't make sense, and in the end, Wal-Mart is going to fail again.
And what about Amazon.com's streaming service? Well quite frankly, they're not much different. A lot of newer movies, but you are still lacking in the classics category, without paying just as much for a 30-year old movie, if you cared about such a thing.
The daunting question still remains: why would you pay $3.99 for a digital rental, when you can go down to Redbox, or your local video store and rent it for significantly less? It doesn't make sense.
3. Netflix users are more loyal than you think.
Don't let the reports of former subscriber outrage fool you. The truth is, more people stayed with Netflix than left. Sure, people were mad when they found out they had to pay extra for streaming, but the majority of users just chose etween one or the other. I had both, now I just use streaming. And those of us who are relatively cheap like it that way.
$7.99 a month for unlimited Netflix streaming is still a better deal than one channel on cable. I have both Netflix and DirecTV, and when I do want to see something new, I walk down to my local video store and get it. I have a Redbox account, but I use it maybe once or twice every other month.
Simply put, I like the diversity of Netflix. I like having to think about what it is I want to watch, and on the backend, they seemed to honor my request and add more content to my liking.
And when I recently took into consideration the prices for the DVD service, it made me think, and now, I'm thinking about restarting my DVD mailing service on Netflix. Two DVDs at a time is only $20. That means that you can pretty much watch six new movies a week for $20 a month, if you return the movie after viewing it immediately.
Six movies a week times, four weeks a month, equals 24 mailer movie rentals, plus all the streaming movies that you want.
Seriously people, you're going to complain about that?
4. Netflix is branching out.
One thing that the larger studios in Hollywood realized over the last 15 to 20 years was that they were going to have to diversify and order to survive. It's one of the reasons why you see Disneyland California Adventure, Universal Studios Orlando Florida, and the like. It's why you see Star Trek licensed practically everywhere, including Las Vegas. The bigger you are, the more legs you have to prop yourself on.
Netflix is no different. As of this year, Netflix has begun licensing and creating its own programming. "Lilyhammer" is its first offering, a comedy/drama about a mobster that's relocated to.of all places, Norway. It stars Steven Van Zandt of Bruce Springsteen fame, and it's pretty good.
They are also in the midst of producing new episodes of the Fox cult classic "Arrested Development" as well as some other original programming. Also in the resurrection rumor mill: CBS's "Jericho", and Comedy Central's "Reno 911".
It has been estimated that Netflix will spend anywhere from $75 million-$100 million over the next few years creating new content for its subscribers... and its subscribers only.
In other words, instead of crying about the movie studios taking their ball and going home, Netflix is creating their own ball. "Lilyhammer" has already been certified as a hit, and will be back as soon as more episodes can be made, probably sometime next year.
Original content puts Netflix way ahead of the other streaming services in this regard.
Enough with my defense of Netflix. People are just going to hate. That's just the way it is. But to say that Netflix is beating its last breath like some of these articles have irresponsibly is just ridiculous. Netflix is a great deal for the money. And if you haven't plunked down $20 a month for the streaming service with the mailer service, or even tried just the streaming, then you should just keep your mouth shut, and grumble to yourself.
If you want to check out Netflix, go here.
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