Netflix, Inc. (NFLX): Is Now the Right Time?

Besides its current stock valuation, the company faces significant competition in the video-streaming space. The most direct comparison right now would be Amazon’s Prime streaming service. Similar to Netflix, Inc. (NASDAQ:NFLX), users can sign up for Amazon Prime and watch TV shows and movies on demand. But, Inc. (NASDAQ:AMZN) also offers newer movie releases that can be purchased separately, something Netflix doesn’t have.

Similar to Netflix,, Inc. (NASDAQ:AMZN) just released original content last week, albeit in the form of 14 pilot episodes rather than several full series. The pilots are available to subscribers and non-subscribers alike and Amazon asks everyone to vote for which shows they want the company to create a series for. If consumers respond positively to Amazon’s original content, it could create serious competition for Netflix.

Another major player is obviously Apple Inc. (NASDAQ:AAPL)‘s iTunes, which just turned 10 years old this week. iTunes posted $2.4 billion in revenue in the past quarter and offers movie and TV show rentals and purchases. While Apple Inc. (NASDAQ:AAPL)’s venue may not seem as current as Netflix’s offering, iTunes takes up 67% of the TV show sale market and 65% of the movie sale market. If Apple Inc. (NASDAQ:AAPL) were to expand iTunes into a more subscription-based model, it could certainly hurt Netflix, Inc. (NASDAQ:NFLX)’s position.

The last concern, but certainly not least, is Coinstar, Inc. (NASDAQ:CSTR)‘s Redbox. The company recently launched Redbox Instant with Verizon Communications Inc. (NYSE:VZ), an online video monthly subscription service. Right now, Redbox only offers movies, which gives Netflix the upper hand. But Netflix investors shouldn’t ignore this move into online streaming. If anything, they should be concerned that another company moved from a physical DVD company into an online streaming service — just like Netflix has. Coinstar’s Redbox isn’t likely to take down Netflix anytime soon, but the fact that there is yet another online video-streaming option for consumers should worry investors at least a little.

Netflix, Inc. (NASDAQ:NFLX) investors should be happy with the company’s current run, but the online-streaming world can change very quickly. Think of how fast music-streaming service Spotify became a major competitor to Pandora. The online video world is wide open, and Netflix will need to continue to build its original content successfully, broker great deals with other content creators, and manage the business well in order to stay on top.

The article Is Now the Right Time to Buy Netflix Stock? originally appeared on and is written by Chris Neiger.

Chris Neiger has no position in any stocks mentioned. The Motley Fool recommends and owns shares of, Apple, and Netflix.

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