Netflix stock takes another beating

Steve Henn Oct 25, 2011
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Netflix stock takes another beating

Steve Henn Oct 25, 2011
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Kai Ryssdal: Once upon a time, there was a company called Netflix. And it did very, very well. Then it raised prices, and customers got angry. Then it tried to spinoff its DVD-by-mail business, and customers got angrier. Almost a million walked away. And still, it got worse.

The company said yesterday it could actually lose money for most of the next year. Or, to get more real about it: back in July, one share of Netflix stock sold for more than $300. At the close today: $77.

Marketplace’s Steve Henn reports Netflix has been tying itself in knots trying to play in the age of online streaming.


Steve Henn: If you ask a media expert where TV is headed, you are likely to get a two-word answer: online streaming.

Ben Rose: I think it is the future.

Ben Rose is a media analyst at Battle Road Research.

Rose: The only question is: How long does it take the future to unfold?

When you stream your shows online, you can watch what you want, when you want. You can catch NFL games on your Android. Rose says it’s the way young people watch.

Henn: What’s your favorite show?

Rose: My favorite TV show? I enjoy “The Office.”

Henn: How do you watch it?

Rose: Through conventional TV.

Rose can see the future, but he’s living in the past. He could watch “The Office” anytime — he can get it through an XBox, watch on Hulu Plus, stream the British version on Netflix or buy it on Amazon.

Netflix begans as a DVD rental business. Then it helped create the online streaming business. But today, online competition is intense. And it’s just beginning.

Max Dawson is an assistant professor of radio TV and movies at Northwestern.

Max Dawson: The CEO of Netflix, Reed Hastings, has spoken out about his desire to not allow Netflix to get surpassed and left in the dust.

Amazon and Apple are after a piece of this market, and so are the cable companies. Dawson says Reed Hastings is pushing his company toward the faster than many of his customers want to move.

Dawson: He’s desperate to have Netflix not become AOL or MySpace or I guess Friendster or any of the other companies that come along and establish something new or novel and then…

Get crushed.

In Silicon Valley, I’m Steve Henn for Marketplace.

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