Rick Hanley

Netflix: Overwhelming Number of Competitors Makes For a Difficult Buy

Dennie - So Netflix made Wal-Mart shiver in their boots? Please. Have you noticed that no one has bought Netflix?

Anyway, the competition for consumer cash and eyeballs grows ever larger. Will Netflix survive what is happenning in the market? Comcast, in partnership with C-COR, is bringing to the thousands of very small cable companies the capability to offer VOD. The millions of customers of these small cable companies have been one of the sweet spots for Netflix and the other online DVD rentailers.

In June, Wal-Mart will begin to offer, for purchase by mail order, 60,000 catalog titles, obviously covering much of the catalog films in existence. Catalog films are the bread and butter for the Netflix business model. Imagine the price points that someone like Wal-Mart can offer in this space.

Game console sales are exploding and they provide a double whammy on Netflix during this round. Not only is the number of gamers growing dramatically, the consoles allow downloding of movies, TV shows, etc.

Remember, there is a limited amount amount of time and cash to go around. Netflix's own projections are fro decidedly slower growth.