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Will Netflix Become the First Wireless Premium Channel?

If you look closely at what is happening at Netflix (NASDAQ: NFLX  ) , you can see that a sea change is occurring in how the company is approaching the market. Where competitors like Redbox Instant -- the joint venture between Coinstar (NASDAQ: OUTR  ) and Verizon (NYSE: VZ  )  -- are pushing for quality movie content, the original video streamer is letting titles fall out of contract and focusing instead on original and exclusive content. Netflix is clearly focusing on drawing business from customers that want what only it has.

While premium cable channels, including Time Warner's (NYSE: TWX  ) HBO, are offering a streaming option as well -- often with better functionality than is available through traditional means -- these are add-on services to their primary cable subscription option.

In the video below, contributor Doug Ehrman discusses where Netflix seems to be headed, why, and how this strategy may play out in the future.

The tumultuous performance of Netflix shares since the summer of 2011 has caused headaches for many devoted shareholders. 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 The Motley Fool has released a 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. The report includes a full year of updates to cover critical new developments, so make sure to click here and claim a copy today.

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  • Report this Comment On May 09, 2013, at 8:02 PM, AceInMySleeve wrote:

    As Reed said at the last conf call, 20 documentaries on the same subject bring diminishing returns compared to fetching the single best one.

    So the key direction change seems to be somewhat of an abandonment of the long-tail paradigm. The key question is where does this content go to where it gets better return on the investment for the owners of it, or in other words why are they charging more than Netflix is willing to pay? I suppose the best guess is it dribbles into traditional ad-supported cable. It may also get picked up by Amazon or similar. But I don't really know..

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