Why Netflix Is a Long-Term Winner

In the following video, Jason Moser discusses Netflix with David Meier, who shares the important takeaway messages from yesterday's Netflix investor conference.

Although Netflix has been a volatile stock over the short term, David sees it as a long-term play. He compares it with and Comcast, both of which are making farsighted investments with the intention of becoming the consumer's preferred entertainment provider, just like Netflix is.

David describes the company's business model as buying content first, such as through movie deals with Disney, and attracting subscribers later. He compares the great content with that of AMC Networks, another company that's been successful lately. He emphasizes the timeless nature of Netflix's great content even as television continues to evolve and content delivery methods change with the advent of new devices.

Given these positives, David closes by saying that Netflix is worth buying, even at today's prices. He sees value in the company's database of viewer preferences and in its long-term investments in technology.

The precipitous drop in Netflix shares since the summer of 2011 has caused many shareholders to lose hope. While the company's first-mover status is often viewed as a competitive advantage, the opportunities in streaming media have brought some new, deep-pocketed rivals looking for their piece of a growing pie. Can Netflix fend off this burgeoning competition, and will its international growth aspirations really pay off? These are must-know issues for investors, which is why we've released a brand-new premium report on Netflix. Inside, you'll learn about the key opportunities and risks facing the company, as well as reasons to buy or sell the stock. We're also offering a full year of updates as key news hits, so make sure to click here and claim a copy today.

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  • Report this Comment On February 27, 2013, at 1:51 AM, tom2727 wrote:

    David describes the company's business model as buying content first, such as through movie deals with Disney, and attracting subscribers later.

    He emphasizes the timeless nature of Netflix's great content...


    But they aren't buying content. They are RENTING it. As far as I'm concerned, that makes them the dumb pipe for the content owner. If they were buying content, that would be a winning business model.

  • Report this Comment On February 27, 2013, at 2:27 AM, TheGrowingValue wrote:

    The analysis was so shallow. Netflix is spending money that it does not have. Did he even think about how many billions of dollars of content obligations Netflix already racked up? The last time I checked Netflix cannot print money like the U.S. government. Netflix may not even have a long-term. It can go bankrupt in just a couple of years if they continue to be so careless on spending money.

    $100 million spent on House of Cards and there is no impact on the traffic or subscription. This kind of short-term result will surely ensure Netflix has no long-term future at all. It may not even be around in the short-term.

    How can anyone analyze an investment without even considering the valuation? It is so absurd that so many articles, videos, etc. all bought into the PR of the company and tried to be the cheerleaders of Netflix without even looking at the valuations. Netflix PE is 600. Netflix will not be able to grow fast enough to ever justify the lofty valuation for years to come. In fact, Netflix earnings declined 77% year-over-year. And with such careless use of money with no result on investment, it will only get worse, not better. I guess once PE is high enough, it does not matter anymore. LOL. What is the difference between PE 600 or 6000? If Netflix is losing money I guess it is even easier to ignore PE. Feel like dot com bubble era all over again. This can only end ugly.

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