People have been predicting the demise of Netflix (NFLX) from pretty much the day they opened shop.
One of the reasons some have doubted it is because it was said not to be fast enough in getting the movies to the home. Although it usually takes only a couple of days with its distribution centers being in 39 major population hubs.
Another reason there have been so many doubts is that cable and phone companies are growing their broadband base exponentially at the moment, and as a result many believe that the future will look like iTunes rather than Netflix. In other words the future is downloading not putting DVDs in envelopes.
The company has been battered in its stock price as it is down $12 from its high in 2004. It trades for around $27 dollars as of this writing (6-7-2006).
Of course it has some competitors out there that are offering the same business model, both on the national and local level.
That and movie studios are offering their online version of iTunes called Movielink. You can download movies to your computer here for $1 to $5 and watch any time in the month you want to. Eventually it should be available to download to your TV.
While all of that is reason to question the Netflix business model, next post we'll talk about why they still have a lot going for them.
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