Sensible Investing

Recession appears to be beneficial for Netflix.  Indeed, it remains one of the few companies holding up remarkably well during the past year as consumers are apparently unwilling to cut down on inexpensive entertainment that the company provides; in fact, using company services more instead of going to movie theaters.  Yesterday, Netflix reported earnings that easily beat Wall Street expectations, and upped the outlook for the next quarter and the full year as well.  This MarketWatch article discusses its quarterly results in detail.

The “net” in the company name is getting traction.  Netflix shied away from making its own branded boxes, instead striking partnerships with DVD, TV, and console manufacturers.  That’s a very clever strategy as it allows the company to concentrate on its strengths rather than get involved in hardware manufacturing where it has no experience.  At present,  DVD players made by LG and Samsung, as well as X-Box player now offer Netflix streaming, with more Netflix-ready devices on the way.

Netflix name could well get synonymous with video streaming.  While it doesn’t yet charge for this service, it will undoubtedly do so in the future, increasing revenues and becoming a truly international company overnight.