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Netflix Original Programming Is Dead on Arrival (Update 1)

Tickers in this article: NFLX TWX
Updated from 9 a.m. ET with additional comments at the end reflecting the current session's stock price movement.

NEW YORK ( TheStreet) -- As an original programmer, Netflix is not HBO, it's DOA.

Hemlock Grove, unfortunately, is absolutely dreadful. The Eli Roth-directed drama is an almost unwatchable muddle of horror tropes and painfully creaky dialogue.
--Jace Lacob, The Daily Beast

Ouch. Somewhere Roger Ebert thinks Jace Lacob is a badass.

I asked Lacob, via Twitter, to compare Netflix as an original programmer opposite Time Warner's HBO:

And herein lies the conundrum.

It's patently absurd to compare Netflix to HBO. Yet that's exactly what Reed Hastings has been doing for more than a year. That said, don't mistake Hastings for a fool. He recognizes what he's up against. He spins original programming larger than life because it represents Netflix's last ditch attempt at survival. But it's a long shot.

Nothing has changed at Netflix since 2011. At least not for the better. The following article contains everything you need to know about the company's situation headed into earnings Monday afternoon. Watch the videos. Check the links.

NFLX Longs: Don't Wind Up Like AAPL Bagholders

If the magic carpet ride continues on earnings, it will be because of Hastings' jive talk around subscriber numbers and viewing hours, two metrics that, contrary to prevailing thought, can go through the roof but do very little, if anything, to help sustain Netflix's core business. In fact, the more people watch, the more difficult it becomes for Netflix to license quality third-party content, particularly if Hastings means it when he says he will continue to charge $8 a month for unlimited viewing.

Speaking of conundrums, it will look bad to investors when Netflix goes to the market to raise cash for the third time in three years (expect that to happen within a year or so), but it will come off even worse if Hastings ends up pitching a new pricing scheme to subscribers.

UPDATE 3:00 p.m., ET

Heading into Monday's final hour of trading, NFLX was up roughly 7%, just shy of $175.

The rally comes as no surprise to those of us who have followed Netflix over the years. In fact, I have been bullish Netflix stock from as far back as July 2012 when I urged investors to buy NFLX before it rises from the dead . Reed Hastings presents us with a curious dichotomy; it's really not crazy to have seemingly conflicted thoughts. There's no question in my mind that NFLX could hit $300 per share again before going out of business .