What to Do About Netflix Shares

By

By virtually every standard, Netflix's recent release for the December 2016 business quarter was bristling with victory. Wall Street estimates suggested the company would add 5.2 million subscribers worldwide, but Netflix brought in 7.1 million instead. Netflix added 1.9 million shareholders in the United States alone, again beating the Street by just under half a million, as it called for 1.44 million new subscribers instead. So is now the time to buy in?

With more subscribers comes, inevitably, more revenue, and Netflix had that as well. While Wall Street expected $2.47 billion in revenue, Netflix posted $2.48 billion, with earnings per share at $0.15 instead of $0.14. Better yet, Netflix expects further gains, looking for another 1.5 million subscribers in the US and 3.70 million global for the quarter ending in March.

Netflix plans to offer significant value for these new subscribers; 1,000 hours of new original content is on the way for this year, up almost double from the 600 hours from 2016. A new deal with comedian Jerry Seinfeld will help on this front, and add more value.

However, there are some potential down sides ahead. The incoming Trump administration has been making noises over canceling Net Neutrality policies, which may have an impact on Netflix's ability to provide service. That's speculative, though, and even Netflix notes that, considering how popular it is, even a change in rules wouldn't really impact service quality anyway.  Increasing competition in the field is a point, but Netflix is already in the middle of addressing that.

Those who buy in at any point will hold a piece of television's next generation.

If you’d like to hear more about the issues that the next generation will face, you should head to ITEXPO, running February 8-10 in Fort Lauderdale, Fla.  

A panel session taking place Fri. Feb.10 at 9 a.m. titled “Monetizing Communications Services in a Digital World” will look at the ways traditional CSPs can adapt their models so they can better compete in today’s OTT world and without compromising scalability, performance, or security.

Though I own no shares of this myself, it's still not a bad idea to get in on that movement. Those who'd rather not own Netflix may be able to find welcome in comparable shares elsewhere—Netflix has plenty of competition—but buying Netflix may be a better value than buying Amazon, Google, or the like. Consider, however, that the ongoing recalcitrance of studios may continue to be a roadblock; studios want the old disc-heavy distribution model, and aren't eager to see its multi-million-dollar fodder go into Netflix's all-you-can-binge bins.

As always, be sure to do your own homework on such things, but the key takeaway here is that television is increasingly a matter of Internet access. Cable providers and even studios have to be concerned about this development, as it's fundamentally altering the landscape.




Edited by Stefania Viscusi

Contributing Writer

SHARE THIS ARTICLE
Related Articles

Why SSL? The Purpose of Using SSL Certificates

By: Special Guest    2/27/2020

SSL is what facilitates secure internet as it protects sensitive user data. Regardless of whether or not a website handles sensitive data like credit …

Read More

How Does Prototype Sheet Metal Fabrication Work?

By: Special Guest    2/27/2020

Designers having prototypes made for their clients to view and hold has become a normal part of the designing process. Physical models are much easier…

Read More

Is A 5G Phone Contract A Good Idea?

By: Special Guest    2/27/2020

5G service is slowly being rolled out. Soon, it won't just be the major cities that have access to super-fast 5G network, which is reportedly 20 times…

Read More

Dell to Sell RSA Security to Investor Group

By: Tracey E. Schelmetic    2/21/2020

A consortium led by Symphony Technology Group (STG), an American private equity firm based in Palo Alto, California, the Ontario Teachers' Pension Pla…

Read More

In New York City, Smart Buildings Are All the Rage

By: Bill Yates    2/20/2020

Two smart building proponents sat down for a fireside chat at the ITEXPO in Fort Lauderdale, FL, on Feb. 13. Topic of discussion: "The Intersection of…

Read More