Will Netflix’s continued global expansion and increasing content licensing expenditures cause it to end up in the red for the most recent quarter. That’s exactly what’s going to happen, if B Riley & Co. analyst Eric Wold is to be believed.
Netflix is anticipated to add 1.4 million domestic streaming subscribers, lose 700,000 disc subscribers, and add 900,000 international streaming subscribers this quarter.
Wold thinks that big content licensing deals from rival Amazon Prime Instant Video and other market pressures are going to continue to present challenges to Netflix’s attempts to be profitable. Said Wold:
“We believe the building competitive pressures in 2012, even without Redbox Instant, was driven by the launch and expansion of other bundled offerings and the ubiquitous availability of content — a phenomenon that is only likely to build further in 2013,”
It will be interesting to see how Netflix’s numbers turn out when they are released on January 23. It will also be interesting to see what happens to Netflix revenues when Redbox Instant officially launches.
What kind of ride do you think Netflix is in for this year, Insiders?
[via Home Media Magazine]
I think they will take a hit for sometime. But they have the money to take it. And expand and move on. NetFlix will be fine and down the road they will make some very good money. RedBox will not hit them at all. The RedBox deal will just fade away. The RedBox rent thing is ok. I use it now and then.
But the online set up. No can do!
I will keep Netflix. And Block Buster two out in the mail at a time..
I cut the cable. I just use NetFlix. Block Buster. And Hulu.
Got it all under $35.00 a month..
And doing great!
I love Netflix use it all the time. It is the greatest. I have been a member for years. I tried Hulu Plus didn’t do any more than the 2 week trial. Also if you keep streaming more movies than you don’t waste postage. I would love to watch everything right away I have laptop desk top and wii to view and when I go to my friends I use Kindle fire and their computers. I can movie watch anywhere anytime. I am watching it now. I watch more Netflix than I do tv. I have started watching tv series that I never watched and love catching up. I am 100% satisfied with your service Netflix. And I never have to leave home….
Netflix has to cut, or better still, drop exclusive and or original programming expenditures. If it does so, its expansion plans will eventually converge to a break-even or better proposition.
Likewise, it has to address many of the technical issues:
-do a better job of glitch-free streaming and;
-insist on, or even demand, more closed-captioning for all content–both in English and other languages.
Netflix will do just fine. I really don’t care for their original programming cause I don’t watch those shows. I don’t know what the glitch problem is cause I don’t have any problems. Mine is glitch free and superb quality. They will not have any problems at all.