NetFlix (NFLX) has already announced that it will make movies available over the internet, for free. As long as you are a subscriber to the company’s DVD-by-mail core business.
The video rental company’s revenue for the fourth quarter rose 44% to $277 million as subscribers hit 6.3 million. Even a push by competitor Blockbuster (BBI) did not seem to blunt NFLX growth.
The new Netflix video-over-the-internet program will be rolled out to 250,000 customers each week between now and June. And, it is about time.
It is hard to imagine that with cable VOD and download services from Apple, Amazon and a host of companies like Movielink that Netflix will be able to defend its core business model of DVDs through the mail. Eventually, the typical consumer is likely to want to get all of his video content over the web or through a TV systems that allows virtually unlimited content. Verizon (VZ) is headed there with its fiber-to-the-home project and companies like Comcast (CMCSA) are already in the business.
At its core, with its business model aging, Netflix’s only asset is is customers. And, it needs to get them to move to the internet model quickly before someone else takes them away.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
Top Gaining Stocks
Top Losing Stocks