FACULTAD DE CONTADURIA Y ADMINISTRACION
Profesor: LAF MA Isaac Felipe González Míreles
After a loss of 800,000 subscribers, reaction of anannounced price hike, Netflix’s shareholder panicked. This caused a chain reaction, causing an extreme drop on the prices of its shares.
This company has been growing exponentially and reporting growth onsubscribers every quarter. The shares price also increased at an incredible rate since the announce that streaming costumer would get unlimited hours of streaming media at no additional cost.
Thisgets you to think if Netflix is trying to afford the unlimited streaming access at the expense of DVD users. But after all, this strategic thinking is trying to shift costumers to the internet business.This might not be wrong at all, since this is the future of the company. After a very low cash flow, digital streaming is the best option this company may have for growth and expansion, and much moreprofitable in the long run. Although, we have to remember, it just human nature to antagonize the company they are paying money to.
So, although the market reaction was a painful moment, Netflixstill has a lot where to obtain new costumers. It seems like Netflix’s main problem is not on its costumers, but in the reaction of shareholders and investors in general.
We have seen the Internetfantasy on business growing out of nothing because of the sensation of new technology ideas, and coming down to be realistic after the fascination melted away. Netflix might be going through the same path.Now the price stock came down to a reasonable price and the expectation have been lowered to a much probable future.
With costumers not yet showing any interest to shift over to any rival platforms,such as amazon.com which are way behind in contents offering, Netflix could play its card the right way and regain captured market and more.
But it is very obvious that for a cheap deal, the...