Just a quick one today on an article posted by Dave over at the Motley Fool titled “3 Reasons to Sell Netflix Now“.
Can you guess what one of those reasons are? Yea, competition from Redbox…
Heavy competition : Netflix faces threats from not only Blockbuster’s (NYSE: BBI) Total Access, but also McDonald’s (NYSE: MCD) and CoinStar-owned RedBox DVD rental kiosks. Many investors see this competition, as well as online movie rentals from Amazon.com (Nasdaq: AMZN) and Apple (Nasdaq: AAPL), posing a significant threat to future revenue.
Now, there are many saying Netflix is doing great and you should hold or buy, but these are just some counterpoints coming from an investment club over at Motley Fool.
I am not sure what I think yet. Netflix does seem to be doing well, especially with their recent addition of streaming movies to their new Roku box, the XBox 360, as well as some other players. Since I think streaming is the future, they look to be in a good position.
However, with Redbox’s disruptive pricing model, I do see the price consumers are willing to pay for movie rentals coming down, so time will tell who comes out on top.