Netflix Has Something to Share With You

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Lost in Netflix's (Nasdaq: NFLX  ) September of muck was a move that would integrate sharing Netflix data through Facebook. The offering went live in 43 of the 44 countries where Netflix offers its video streaming service. The long holdout was the United States.

It wasn't that Netflix didn't want to incorporate this viral and sticky feature in its largest market. An outdated law from the 1980s just didn't make it possible legally. The situation wasn't widely publicized, largely because this materialized just days after the Qwikster fiasco.

Well, Facebook sharing should soon be available in all 44 of Netflix's markets.

H.R. 2471 -- the House bill that Netflix was asking subscribers to get behind back in September -- cleared its first hurdle. The House voted overwhelmingly in favor of the bill that will allow sharing as long as a service obtains prior consent. If the Senate follows through, we may soon see Netflix as a more engaging viral service between friends and family members on Facebook.

Netflix realizes that it has to keep evolving. Even if it hadn't suffered the brutal wakeup calls in the wake of the Qwikster and price-hike fiascoes, Netflix can't afford to stand still. This year has seen (Nasdaq: AMZN  ) and Dish Network's (Nasdaq: DISH  ) Blockbuster roll out unlimited streaming services. Verizon (NYSE: VZ  ) is reportedly jumping in next year. They're not Netflix. Amazon's selection is too limited, and Blockbuster Movie Pass is only limited to Dish members. However, they are here -- and Netflix can't rest on its laurels.

Too much change is not a good thing
No one is suggesting that moving too fast is a winning strategy. Netflix has painfully learned that this year, too.

It's a lesson that Netflix may still be learning.

Netflix rolled out an update for Microsoft's (Nasdaq: MSFT  ) Xbox platform yesterday. Going by some of the initial comments on Netflix's blog, it hasn't been a very well received update. Buggy controls and the elimination of the "party" feature that allows Xbox friends with Netflix to watch a stream simultaneously are rubbing Xbox users the wrong way.

There's always a natural level of dissension when something is changed, but it's ironic if Netflix is killing the "party" feature as the same time that it's encouraging data sharing on Facebook.

Will Netflix ever get it right across the board? It seems as if every step forward is followed by two steps back.

 If you want to follow this saga, track the latest news by adding Netflix to My Watchlist.

The Motley Fool owns shares of Microsoft. Motley Fool newsletter services have recommended buying shares of Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Longtime Fool contributor Rick Munarriz has been a Netflix subscriber and shareholder since 2002. He does not own shares in any of the other stocks in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.

Read/Post Comments (2) | Recommend This Article (3)

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  • Report this Comment On December 08, 2011, at 12:11 PM, MKArch wrote:

    Judging by the disclosure that NFLX doesn't know when or if they will every be profitable in all the countries they are launching in that allow Facebook sharing I'd say other than a knee jerk temporary bounce if the U.S. did allow it Facebook is irrelevant to NFLX success. There is either a viable business selling a cheap as dirt subscription to tv re-runs and old movies or there isn't. Given NFLX already massive 50% churn rate before their recent problems and while they were in high growth mode and the fact that cables tv everywhere initiative offers much of the same content free and will eventually offer most of it free I vote no viable business.

  • Report this Comment On December 08, 2011, at 12:22 PM, MKArch wrote:

    BTW 5M subs walked in Q3 and that was back end loaded with increasing numbers into the first month of Q4. That means they'll likely have 6M+ walk in Q4 or 11M+ in the trailing 6 months at end of Q4. That's going to be about half of their sub base walking over 6 months. Do you really beleive selling a subscription to tv re-runs and ancient movies is a business that will still be viable 5-10-20 years from now? Hastings says subs want last years episodes of Pawn Stars not last years hot movies. Are you buying this? BTW if you think about his argument it's a red herring. The numbers of hours of tv re-run programming dwarfs the numbers of hours of Starz movies on Netflix and that's why when you judge the two by hours viewed tv re-runs beats Starz movies.

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