A year ago, Netflix's stock was trading around $80 and the company was
still recovering from the disaster that was Qwikster, a poorly advertised
DVD-only business the company launched and quickly aborted. Things were not
Today, Netflix's stock is trading at around $260. And it could rise higher after the Emmy Awards in September, where the company is up for 14 awards for its original programming.
The stock's sharp rise has come on the back of a provocative dramatic series, but also on the wings of better streaming video technology and smart analysis of viewers' interests. More than anything, the Los Gatos company, which reports quarterly earnings Monday, continues to lead the charge in blurring traditional lines defining website, TV channel and production company -- as well as the concept of scheduled programming.
"We really have to view them as a new beast," says Mike McGuire, a media analyst with Gartner.
It's a beast that will have to be tough, and lucky, to survive. The traditional movie and television industries have deep, entrenched interests and contracts that will make Netflix's continued success difficult. And other digital networks are either mimicking Netflix's success or blazing trails of their own.
And while Emmy nominations bring attention, will they do much for boosting customers?
"No, not really," says Bruce Leichtman, principal analyst of Leichtman Research Group. "Those that are influenced by that are already there. If it becomes a habit, then maybe."
Fourteen nominations is a respectable lot. But that number pales in comparison to those earned last week by the likes of HBO or Fox. Forbes' Hollywood writer Dorothy Pomerantz points out that "Netflix is basically being lauded for one good show, while Showtime and HBO have deeper benches." Beltway political thriller "House of Cards" received nine of Netflix's nominations. "Arrested Development" got three and horror series "Hemlock Grove" two.
On the other hand, the TV networks may have apps that stream content or put their episodes online, but still largely rely on television audiences and advertising dollars -- a model increasingly under fire due to DVR systems that allow recording and fast forwarding.
Netflix doesn't rely on advertisers, so isn't subject to their checkbooks. As with HBO, consumers pay extra for a Netflix subscription. All of Netflix's content is streamed to phones and tablets via a free app, to computers via Web browsers and even to TV sets via partner devices like Sony's PlayStation III.
That frees them from having to negotiate packaging deals with cable providers like Comcast and Verizon.
"That's always been their advantage," McGuire says. He points out, though, that the flip side of that freedom is not being bundled in with big networks that carry eyeball-attracting programming like the NFL and NBA. "Live sports is one of the main reasons people still have their programming packages."
He adds: "We're not seeing any of those (program) licensing deals going down in price. Over time, that's going to be the cable companies' problem."
Netflix is said to be following in HBO's footsteps, going from a pure movie-viewing channel to a site where people pay for quality original content.
But there are some key differences. Netflix makes its own schedule, unburdened
Most Popular Stories
- Twitter Coming to Phones Without Internet
- Entravision Initiates Quarterly Cash Dividend
- Shanghai Smog Forces Factory Shutdowns
- Warner Bros. Unleashes 'Hobbit: Desolation of Smaug' Merchandise
- Amanda Bynes Enrolls in California's FIDM
- Obamacare Doing Just Fine, Ky. Governor Says
- How to Arm Yourself Against CryptoLocker Virus
- Eagle Deaths OK'd for Wind Power
- World Cup Draws: Coaches, Players Offer Insights
- Consistent Hiring Points to Stronger Economy Ahead