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Netflix on track and on target - critics still murmur

By PETER WHITE

Published: 27 January, 2012

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News is sometimes like a wild beast. It hounds celebrities when they just want to be left alone with their addictions, and in business to business journalism it is so for writers to chase the same old headline about the same old companies.

For years we fought to tell the world that Apple was a great company, but the industry only slowly began to understand what we meant. We have done the same in championing TiVo, simply because we believed that it had genuinely invented the DVR, and that it deserved to survive on its intellectual property alone.

Now as we write about the core values of Netflix, its online content mantra - any device, any content, any time - finally has some meaning - we find flippant headlines harping on about losses in its international business, or talking about replacing failed executives. It may take a long time before coverage is positive, but knee-jerk, bored, habit filled headlines about Netflix miss the point entirely. No-one mentions if an Apple product makes a loss in its first few weeks do they?

Netflix promised underlying growth in US subscribers in Q4 and delivered them. It said that cancellations by DVD customers would slow and they have. It promised international subs growth to rival prior US periods, and it delivered. It spent $2.3 billion on content last year and now all we hear are snide comments about whether or not it has enough money or enough content. Wake up.

The company borrowed $400 million late last year, just in case, but has spent none of it and after its marathon spending spree has $798 million in the bank and added $34 million this last quarter.

It's not Apple by any means, and it's not out of the woods. But any other company who had not had a journalist feeding frenzy 6 months ago and the world would be singing its praises and buying it's stock. People feel they have every right to beat up Netflix some more, before forgiving it, its one misstep. And it takes a while for headline writers to come up with something new.

Request a more detailed 1,300 word analysis from peter@rethinkresearch.biz

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