Earnings season may be over, but the annual-reports season is in full swing. DVD rental expert Netflix
Video on demand is both a weapon and an enemy. The rise of VOD services from Comcast
That online streaming service, barely launched a year ago, gets a lot of fresh space now. In fact, nearly all of the serious changes are related to download services. In 2006, Netflix acquired all its movies through direct purchases or revenue-sharing agreements with the studios. Now, there's a licensing component, where the company negotiates directly with studios like Disney
There are now 69 million DVDs in the Netflix inventory, spread over 90,000 different titles for an average of about 767 copies per movie. Last year, the ratio came out to 785 per, so the company is either tightening the supply on blockbusters, or expanding the long tail of its library more quickly.
Finally, I think there's an international expansion in the cards. Last year, Netflix was a registered trademark in the U.S. and United Kingdom only. Canada, Australia, and Japan have now joined the party. There haven't been any service announcements, but Netflix wouldn't bother to apply for trademarks in markets it doesn't plan to enter -- even if it only offers a digital-only plan.
Fewer competition worries, tighter inventory control, and global expansion plans. Why wouldn't you want to own this brilliant business today?