Netflix results, price turns sour.

I've always believed that the easier you make it to buy your product the more of your product will be sold. Remember that rant I had at retailers who were complaining about swipe fees? I said that they were shooting themselves in the foot because at the end of the day being able to pay by card has been a huge benefit to retailers worldwide because it makes the purchase easier. I bring this up because we have had some news over the last few days from two companies who have or are in the process of making consumption just that bit easier. Last night we had Netflix results coming out from New York and on Friday we had the release of Multichoice's new BoxOffice service.

I'm not going to go into detail with regards to the Netflix numbers because they are not a recommended stock but I will talk about what they do because that, I am very interested in. I have brushed on this before but let's refresh. Netflix have revolutionised the way we consume movies. Basically they killed the DVD store. In the States where bandwidth is first class Netflix allows its users to stream movies via their computer, TV or game console as long as it has an internet connection. The Netflix share price has gone from $23 at the end of 2008 to $281 where it closed at yesterday. So yes, they have done well.

For the record the company is down 10% pre-market due to a big miss in new subscriber growth. Reasons for this include an increase in pricing and aggressive competition. The risk of usage based broadband pricing is also a worry as unlimited broadband services are being abused. In this theme we prefer Amazon. As Sasha mentioned earlier the ability to buy a book in the comfort of your home and be able to read it within minutes is incredible. Amazon already offer the service of streaming movies and with their already bigger client base and their own hardware in the form of the Kindle, they may just overtake Netflix in the long term. Their results come out today so more on them tomorrow.