Did Amazon's Earnings Signal End of Netflix?
There have to be limits of course, but is it really appropriate for investors to have to sit idly by while the management team sets its goal for styles and colors at a grand total of one? Netflix's CEO Reed Hastings can do better than that for investors.
There is no question about the brilliance and business intellect of Hastings, as demonstrated by Netflix's crushing of Blockbuster. While highly impressive, we also see the same sort of thing happen with smaller family-run businesses from time to time. The owners and or management guide a company from zero to hero very quickly and then find they can't manage the growth anymore. Basically the company outgrows the management.
This is the key moment when management must decide if they are able to navigate in new waters and environment or not. If they can, everyone wins, but if they are not up to the task, we end up with is another flash in the pan "here today gone tomorrow" type of business.
I like Netflix as a service too. I watch mostly documentaries and some movies when I watch TV. Netflix streaming almost always performs well without any issues. Netflix has done a great job delivering what they do have in content.
Remember Palm, or how about Crocs, AOL and First Solar ? These companies made big splashes for a short while, but their management teams where not up to the task of navigating through the vastly changed landscape.
It doesn't take too many tripped landmines before shareholder equity gets blown to pieces. Price increases, ease of use, programming and monetizing current customers instead of focusing on trying to gain more low-income producing customers - these are all landmines Netflix better not step on or step on again.
With Apple, you can buy a movie or song, you can rent a movie and the process is made simple and easy. Full-movie streaming on demand -- neither an envelope in the mail is needed nor waiting for it to arrive. Within five minutes a viewer can transverse from searching a huge library of movies to watching the opening credits.