I'm not normally one to make an investing argument based on arbitrary milestones or my personal preference for a product. But I have to admit, as much as I love getting DVDs in the mail, and as much as Netflix
On one hand, 3 million is just a number, but on the other hand, it means a lot. You need only look at my colleague Rick Munarriz's Stock Madness piece -- which cites the year-end total of 2.6 million -- to see how quickly Netflix can move. It's still gathering an impressive base and still at an impressive speed. And as other Fools have argued, a big and growing pool of subscribers is not only the source of the firm's much-needed revenue growth but also the core of its competitive advantage. Briefly put: More users means smarter software, and a better ratings system, something that I find pretty important as a Netflix customer.
It took from 1999 until 2003 for the firm to gather its first million. The next million was under the belt by May 2004, just more than a year later. This third million took only 10 months to gather. This is one of the advantages to being the first mover in a new field, one of those Rule Breaker things.
The trouble for investors, of course, is that this is still a scary story. There's a war for hearts and wallets with Blockbuster
Earnings estimates are all over the place, and the ongoing price war can invalidate anyone's revenue models with the stroke of a pen. At its crux, an investment in Netflix is still a faith-based initiative, but for today, at least, there's a bit more hope.
Netflix is a Motley Fool Stock Advisor recommendation. Learn more by subscribing today. There's a six-month money-back guarantee if you aren't totally satisfied.
For related Foolishness:
- Do numbers matter for Netflix?
- Netflix vs. Harley. Vote your conscience.
- Netflix is going downscale. That's good, too.
More from The Motley Fool
Tech Is Walking Away From Wearables
What we did and didn’t see at CES, and what that means for the biggest trends in the tech industry.
Nintendo Switch Is the Fastest-Selling Console in U.S. History
And it could be on pace to become the best-selling console ever. How has Nintendo worked this magic?
Our Best Foolish Advice for Getting Healthier and Wealthier in 2018
At The Motley Fool, we assert that financial fitness and physical fitness can be linked.