Netflix Competitors Can Only Play Catch-Up

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by: Geezeo

Netflix (NASDAQ:NFLX) has more than 10 million subscribers and like this recent article, "Netflix passes 10 million subscriber mark", discusses, it is the only firm in the marketplace offering instantaneous viewing of its media to consumers.

So how come the firms' competitors, namely Amazon (NASDAQ:AMZN) and Blockbuster (NYSE:BBI), aren't following suit? The simple answer is that Netflix has positioned itself to be the trailblazer in their industry and the other firms are playing catch-up. Consumer spending has been growing steadily, rising 5.75% in 2008 overall according to MSSI figures.

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Delving deeper into the numbers reveals that the subscription retailer’s revenues are more than assured for the short term, but the main issue is sustainability. As was brought up in an MSSI story last year, "Busted Blockbuster", the future lies in online expansion and ultimately profitability, which as Amazon can attest to is difficult in a still developing industry.

With plans starting from as little as $4.99/month, the issue will be if the content producers can be compensated enough by firms, like Netflix, in this ever-changing marketplace. Netflix has proven that people are willing to pay for both good content and customer-oriented products, but expanding its business in the digital arena will certainly be well fought by its competition.

This data was compiled by the Geezeo Main Street Spending Index (MSSI).