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Analyst Drops Netflix Rating

It’s getting crowded out there in the streaming marketplace, and not everyone thinks Netflix has the chops to stay atop the heap. Analyst Aaron Kessler with Raymond James has dropped his Netflix rating from “market perform” to “underperform.
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Kessler’s reasoning for the drop is based on slowing growth and an increasingly competitive marketplace:

“While Netflix experienced strong growth going from 9 million paid subs at the end of 2008 to 21 million subs at the end of 1Q11, growth has leveled off since, in part due to the 3Q11 pricing change, though Netflix is potentially being impacted by the law of large numbers and rising competition,”

As far as who Kessler thinks is the biggest threat to Netflix, you can take your pick:

“We believe the main competitors today for Netflix streaming in the U.S. include Amazon, Hulu, HBO and Showtime, though we believe other players including Google, Apple, and the recently announced Redbox/Verizon joint venture and Comcast ‘Xfinity Streampix,’ could become more competitive as well,”

What do you think, Insiders? Can Netflix hold its own with so many rivals out there vying for finite consumer dollars and attention spans?
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[via Home Media Magazine]

7 Responses to “Analyst Drops Netflix Rating”

  1. Member [Join Now]
    Shemp Howard [shemp-howard]

    Once again Netflix is taking the wrong steps by focusing on TV programming.

    Search “Once Film-Focused, Netflix Transitions to TV Shows” via the New York Times.

    This should cause stock price to ‘take a haircut’.

    • Visitor [Join Now]
      Marshall [visitor]

      Not really. They have statistical data of what people watch and are basing it on that. If people wanted movies they would watch them. That being said any report that Netflix isn’t after movies is hyperbolic at best. Hugo just won 5 academy Awards and it’s expected to hit streaming the day of if not before the disc release.

    • Visitor [Join Now]
      Vernon Dent [visitor]

      The stooge is right here.

      Netflix should focus on ORIGINAL or EXCLUSIVE content. Everyone and their sister is just streaming the same dreck.

      • Visitor [Join Now]
        Marshall [visitor]

        But that’s not what the stooge said. The stooge and his cited article want Netflix to focus on movies and oddly enough Starz content. Netflix exclusives and originals are good but they would be considered TV content being short form episodes. Starz had some good content but Netflix doesn’t need Starz nor will it hurt their stock price.

        Actually the terminology needs to change being that movies are on TV and some TV content is online only hence not just TV but computers and other devices.

        I’m a little surprised however by all the non-exclusives. It seems every Amazon deal is a recycled Netflix deal. Hulu has some exclusive deals but a lot of those lately are new seasons of shows that Netflix has the older ones.

  2. Visitor [Join Now]
    Firstlawofnature [visitor]

    It’ll hold it’s own in cheap streaming while redbox holds it’s own in cheap rentals. All the competitors listed have ultimate goals that are beyond the simple ones netflix and redbox have of providing a cheap convenient entertainment. Focus wins and only flix and redbox have it.

  3. Visitor [Join Now]
    tinybrat [visitor]

    Once Verizon/Redbox gets their streaming up and running, netflix will really feel the pain. Even if they have identical content, Redbox can come in and undercut the cost like they did with DVDs and really put the hurt to netflix.

    • Visitor [Join Now]
      Marshall [visitor]

      If Redbox gets the same content as Netflix and has a lower price then yes Netflix would be in trouble. The chances of them launching like that or even getting the content within a year are about the same as the chances of space aliens stealing our sun and using it as a heat lamp in their giant McDonald’s franchise.

      Redbox has stated that they don’t want Netflix content. They want the streaming to work the same as their kiosk which is new content filled out with a few transitioning staples.