We talked a little about Netflix yesterday, and though things are looking good for them Rafat Ali of PaidContent notices some doublespeak coming out of the company:
Netflix CEO Reed Hastings is the king of indecisiveness, at least when it comes to his company's digital plans. Over the last 2-3 years, he has talked about how digital movies is his company's future, and yet talks down the industry at any opportunity he gets, to defend his own mail-order business. This is not a putdown of his company, which is doing just fine, but he needs to get his talking straight.
Case in point: Last quarter, the company announced that it is delaying its online movie service plans. Now, when the momentum for video downloads and delivery has increased over the last few months, the company is touting its digital plans again.
But first, the Q4 2005 results: its Q4 earnings went from $143.9 million to $195 million, and profits spiked from $5.6 million to $38.1 million. Also, during the conf call, the company said will invest $5 million-$10 million in technology in 2006, while CFO Barry McCarthy predicted Netflix will "lead the future of digital downloading."
Here's his double-speak: Hastings also cautioned that studios' lucrative TV output deals would provide drag on a wide range of films being available for download -- to the benefit of Netflix's mail business.
No surprise that a company would like to have it both ways, but at this point, questions about VOD are probably crucial to the company's outlook. A misstep, and they could quickly end up looking like Blockbuster in a few years.
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