Market Shrugs Off Major Outage At Netflix (NFLX) (BBI)

To hear it from CNBC, you would have thought the world had come to an end for Netflix (NFLX).
          

"It started this morning with an email apology from online movie rental powerhouse Netflix, confirming to its 8.4 million users that the company was suffering a shipping and distribution outage," writes CNBC’s Jim Goldman on the network’s Web site "I called the company this morning to get more information and spokesman Steve Swasey was candid, forthcoming and easily accessible; hallmarks of good damage control when a company is under the gun. As soon as I got off the phone with him, I went on the air and broke this story."

Memo to Goldman: Dude, you are not dodging bullets in Iraq or in Georgia. The story behind your scoop is not that interesting.

What I find most fascinating is that the market is ignoring Goldman’s sensational story as well. That’s surprising considering that any smidgen of positive or negative news about stocks such as Netflix sends them either into orbit or crashing down to earth. Did investors just miss the news?

Goldman’s self-aggrandizement aside, this story deserves more attention. The DVD-rental company is having difficulty shipping DVDs. It’s what’s supposed to be its core competency, no? What’s worse is that according to CNBC, the Web site has gone down twice before.

Netflix is issuing boatloads of credits to customers who judging from the Hacking NetFlix Web site, are irate. Management needs to hold people accountable for these screw-ups otherwise Netflix’s rabid customer base may switch back to the company’s number one nemesis Blockbuster (BBI).

Jonathan Berr