Look at what they are reporting about their own acquisition costs:
Subscriber acquisition cost for the third quarter of 2006 was $45.32 per gross subscriber addition, compared to $36.33 for the same period of 2005 and $43.95 for the second quarter of 2006.
Acquisition costs are growing rapidly in percentage terms. A 25% increase in comparable quarters is huge. There is a good chance that they will be buried in acquisition and retention costs as they try to attract and keep clients. Could become a mug’s game.
Read Netflix's most recent earnings conference call.
NFLX 1-yr chart:
