Cramer: Netflix Nails It
Netflix exists because people want to watch programming when they want on the device they want. Netflix succeeds because it is inexpensive. Netflix thrives because of the change in programming on cable and how much more people like cable shows than they do network shows except for a couple enduring comedies and some longer-running dramas.
But because it stumbled and because it seemed to be out of money when it dropped below $100, it had become hated by people who either didn't understand it or dug in their heels rather than declaring victory as they might have on the long side.
In short, it went from loved to hated faster than I have ever seen a stock travel that distance except the speed with which it is now loved again by owners and still needs to be loved by analysts. Hence how it could have such a huge move last night.
Let's go over what Netflix did right that the Street didn't expect.
First, when it screwed up and created that screwy plan to force adoption to online, the owners and the analysts figured that was the end of Netflix -- that users would be so angry they would switch to Amazon or Apple's
Editor's Note: This article was originally published on Real Money on April 23. To see Jim Cramer's latest commentary as it's published, sign up for a free trial of Real Money.
What people didn't understand, though, was that the Web was adapting so fast to high-speed at the same time that the tablet had been born that Netflix was simply too cool a product not to have. And when you compared it to cable, it's a real bargain, especially because, other than sports, who the heck cares when you watch something.
Second, the mea culpa of management was dissed by Wall Street, but the customers loved it. The customers came right back. That wasn't in the playbook.