Netflix disappoints The Street

24 07 2007

Days after Google’s ouch moment which saw it shed 7% of its value, comes news that Netflix has reported its first ever quarterly drop in subscriptions, revenue and profit. Investors weren’t kind in their response and 16.5% has been shed from its stock price, since news emerged of weaker trading conditions.

The source of its malaise, says this report, is beefed-up competition from Blockbuster. Clearly Blockbuster has greater brand recognition, so either Netflix markets its way out of the situation or simplifies its aspirations. But competing with US $170 million of Blockbuster spend is going to be a tall order to pull off; combined with the latter’s advantage of a bricks and mortar presence.

The real KO round begins as both companies start seriously ramping up their digital store offers.




One response

2 08 2007
Netflix - why can’t it add up? « The Beyondness of Things

[…] by Netflix (NMS: NFLX) when calculating its churn rate. Just over a week ago the company’s latest numbers wiped 18% from its stock value (and currently down 32% since the start of […]

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