Netflix, Inc. (NASDAQ:NFLX) has reported its earnings report on Tuesday, which was very impressive and popped the shares up by more than 25%. The stock is currently trading at around $420, nearly $100 more that where it was trading before the earnings report. Netflix, Inc. (NASDAQ:NFLX) also said that it considers HBO as its main threat and competition, since HBO is slowly moving into streaming service. Netflix, Inc. (NASDAQ:NFLX) has also mentioned in the letter to investors that Pirating is another big threat to its business. Allison & Partners Digital Head, Jeremy Rosenberg talked on CNBC about the situation with piracy and how companies like Netflix, Inc. (NASDAQ:NFLX) can handle them.
Rosenberg mentioned that interesting thing about piracy is that it is very hard to quantify. He added that many people have tried to study and understand the impact of piracy on the industry. Be he feels that it is very difficult to quantify the impact of piracy in dollars. He said that many entertainment companies and motion pictures are considering piracy as a big threat. Rosenberg pointed out that when big online piracy websites like megaupload went down, the DVD sales had got a boost.
Rosenberg said that it is very difficult for Netflix, Inc. (NASDAQ:NFLX) to say that this particular search in Netherlands is the reason behind the subscriber numbers. But how will piracy impact Netflix, Inc. (NASDAQ:NFLX)’s streaming service?
“I think piracy and streaming is going to continue to be a big thorn in the side of entertainment industry. Netflix has gone from kind of a outlier player to major player, with the entertainment they are putting out with the content they are putting out, they are a major player now. I think its going to impact them in the same way it has been impacting DVD sale, the same way it has impacted HBO and other service content services,” Rosenberg said.
Rosenberg pointed at many challenges the Netflix, Inc. (NASDAQ:NFLX) might see in the days to come like, piracy, net neutrality, ability to maintain the standards of original content like they used to and attracting subscribers from other players in the industry.
He feels that Net neutrality might play against Netflix, Inc. (NASDAQ:NFLX), as if at some point they might have to pay more for bringing the contents to subscribers. Netflix, Inc. (NASDAQ:NFLX) has two options to either to bear the loss or to charge more from subscribers, which might drive some subscribers away.
Click here to see the full transcript of Netflix, Inc. (NASDAQ:NFLX)’s fourth quarter earnings report.
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