I've never been on one side or the other of the Netflix debate, but I have to admit, if I were long on NFLX right now, I'd be pretty nervous. Forget that you can buy a PS3 for the price of one share, forget that the selection is so-so. They have bigger problems.
Speaking of SNE, you may have heard that Sony content was mysteriously and abruptly removed from the NFLX catalog. It has been speculated that Sony, along with other movie production houses and copyright holders, will begin to put the screws to NFLX on licensing costs because, well, why wouldn't they? Especially with the PS3 attempting to compete in the increasingly crowded market that NFLX depends on, Sony has no reason to continue to give NFLX a free (or cheap) lunch, regardless of whether they partner with them for the Netflix PS3 app.
Then they reduced guidance and promptly followed that up with the announcement that they would expect lower subscription numbers due to a price increase.
Yeah, I missed the top. But this has the hallmarks of a party that is only interesting any longer because you don't have anywhere else to go. NFLX is the drunk guy having the excessively loud one-way conversation with the ugly chick in the corner about how fascinating his life is, and by now, everyone in the room has noticed. Some probably think this is a a prime buying opportunity (hey, they guy has a chance, right?) but the odds seem to be against NFLX, at least in the near term. If past price-to-earnings ratios of NFLX are any indication, then it would appear to be a buying opportunity, if you ignore the fact that their growth is being threatened from nearly every angle.
I believe that the people who stood to rake in the real cash from NFLX stock have gotten what they came for, and there is not much left to prop it up. Countless articles have been questioning its valuation for long enough that it's time to give it a serious look.
Sorry there was not more comedy in this article. I am in a bad mood because I was just looking for something interesting to watch on Netflix and the best thing it had was reruns of T.J. Hooker season 3.