Netflix (NASDAQ:NFLX) has been the talk of the town in 2015. The stock has gained 152% year to date, the biggest leap on the S&P 500 ahead of Amazon.com's (NASDAQ: AMZN) 116% gain.
That kind of performance doesn't go unnoticed, and the press has devoted miles of column space to the digital video veteran. We've already taken a look at some of the best and most insightful Netflix headlines published this year. But some of the headlines along the way also missed the mark, promising more than the articles could deliver.
So here are three of the worst Netflix headlines seen in 2015:
"An Apple Original Programming Push Could Spell Trouble For Netflix, Amazon"
Oh dear. Where do I begin?
This sensational header appeared in Forbes in September. At the time, rumor had it that Apple (NASDAQ:AAPL) was just about to launch a streaming-video service to end all streaming-video services -- the One True Streaming Experience to rule them all. And of course, Cupertino's entry into that market would kill Netflix.
I certainly see why people worry about this. Apple has the world's largest war chest, bar none. By throwing money at any problem, Apple could easily dominate any and every consumer market in a heartbeat. Right?
Yeah, not so fast. For a recent example of Apple trying to enter a new field without making much of a dent, consider the new Apple Music service.
Apple has dominated the music business for years via the pay-to-download model of iTunes. The digital store became the biggest American seller of music in 2008, and hasn't looked back since. But newfangled options, such as Spotify and Pandora Media (NYSE:P), have cut into that party with monthly subscription models and entirely ad-supported options. So of course, Apple needed a service in that vein, as well.
Fellow Fool Rick Munarriz has already explained why Apple Music has a hard row to hoe. In short, going into this field with an eye toward making big money is often a huge mistake. The music industry is littered with failed or dying subscription services, and Apple Music may be heading down the same path.
The video industry is no different -- or perhaps even more terrifying. It would be easier to name crash-and-burn failures than big winners here, if not for the fact that everyone forgets about the losers almost immediately. If your name isn't Netflix, Amazon Prime, or Hulu, you don't matter in the market for streaming-video services today.
Apple hasn't followed through on that streaming-video threat, facing resistance from nervous content providers. If Cupertino wants to break in here, the company will need to pay through the nose for its early content catalog. That's no way to make money, which is all that Apple really cares about. Killing Netflix would be extremely expensive, and not worth the effort.
Besides, Netflix CEO Reed Hastings would welcome Apple into the streaming-video fold with open arms. Apple's presence would further legitimize the streaming-video business, and Hastings already sees Apple as a direct competitor anyway.
"We compete with video gaming, we compete with drinking a bottle of wine -- that's a tough one!" Hastings said at a conference in September. "We compete with other video networks, with playing board games.... Think of any night you did not watch Netflix. That, what you did, that was the competition!"
That clearly includes a lot of Apple action, with or without a streaming-video service. In short, I don't think Reed Hastings is scared of a more direct Apple-powered rival at all.
"Why Netflix can't afford another 'Marco Polo' flop"
This headline was so preposterous, CNBC eventually changed it. This version spotlights the idea that every new Netflix original series must be a hit, or else the business model will collapse like a house of cards. After all, Netflix is spending a lot of money on new productions, and it can't afford to throw money at failed projects.
Semi-historical epic Marco Polo was held up as a massive failure -- a money sink with no future that couldn't attract new subscribers. First, it's hard to argue that Marco Polo was a dismal failure. Netflix announced a second season in short order, and there's a Christmas special coming up next week. You don't do that for total disasters.
Second, you should expect a few failures along the way, even if Marco Polo wasn't a great example. That's why Netflix isn't betting the farm on just a couple of ideas, but flooding the market with every kind of show you could imagine.
I have quite frankly given up on keeping track of all the Netflix originals, from political drama and stand-up comedy specials to animated kids' fare and deep-dive documentaries. If I tried to watch it all, I'm sure I would end up hating a few titles. In fact, I gave up on Wet Hot American Summer: First Day of Camp after a couple of episodes, and never really noticed that Rob Schneider now has his own original Netflix series going on.
But that's OK, because I've been busy binging Jessica Jones and Narcos anyway. The company is already putting out more high-quality content than I have time to consume, and this will only accelerate in 2016. There's a show for pretty much any niche taste, and the failures are likely to die quietly. Kind of like those superfluous streaming-video rivals you don't remember.
That article's new title, by the way, focuses on China's importance to Netflix's future. It's a saner argument, and one I won't deconstruct here. I'll have to get back to that in another article.
"Netflix announces 7-for-1 stock split; shares soar"
Instead, let's end with a short and sweet facepalm moment. This time, it really isn't the USA Today writer's fault for reporting a solid fact as clearly as possible; I'm just groaning over the actual market reaction.
Yes, Netflix shares rose a few percent when the company announced its 7-for-1 stock split; but it had no business doing that. Stock splits are zero-sum games, holding six in one hand and a half-dozen in the other, and there's no reason to get all excited about them.
Beyond getting a more fine-grained handle on the size of your stock positions, stock splits have no real value. Just ask Warren Buffett, who happily resists splitting Berkshire Hathaway A shares even though they're trading at nearly $200,000 per stub. That hasn't stopped Berkshire from crushing the market over the long haul, and Netflix could have let its share prices approach the $1,000 mark today.
I already took a deeper dive into how this market-moving news never really mattered at all, shaking my head as it was being written. The mass psychology of the stock market can be incredibly frustrating sometimes.
Anders Bylund owns shares of Netflix. He also holds the following options: short January 2016 $320 puts on Amazon.com and long January 2016 $320 calls on Amazon.com.
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