Thursday, June 17, 2010

Netflix: Love the Product, Love the Stock

By Eric Jackson
RealMoney Contributor

6/17/2010 1:30 PM EDT
Click here for more stories by Eric Jackson

I'm in love with the Netflix (NFLX - commentary -Trade Now) product. I know very few customers who don't. Most of the stock jockeys who chat about whether Netflix is a buy, sell, or hold seem to get disconnected from the actual service that is the basis for the stock's price.

What's not to like about being a Netflix customer? It's cheap on the monthly subscription fee considering how many movies I'll rent in a month. It's also efficient. The DVDs typically arrive a day after I order them -- via regular mail. I had a problem once in the last two years of using the service, and the company's customer service was great.

And as much as I enjoy the traditional discs-in-envelopes business, I am an even bigger fan of the Netflix on demand service that I use through my TiVo (TIVO - commentary - Trade Now) service. The service is quick. Downloads appear to be quicker than those from the traditional cable company on-demand services. Even the Amazon (AMZN - commentary - Trade Now) on-demand movies that I can get through my TiVo appears to be slower.

The Netflix on-demand service -- which of course is the future for this company -- is quick and easy. It has the best interface I've seen of presenting possible movie choices to you and learning from your history of selections. It's a smarter service -- and it gets smarter as more subscribers use it. Netflix is in a good position to keep doing well in this business even after the mail-order business is gone.

My biggest complaint against Netflix's on-demand service is that the company still has a relatively small catalog of titles, considering this is one of the industry leaders. Hopefully, with more cash in the bank and a bigger user base, the company will be able to change situation this soon with the Hollywood powers-that-be.


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