Netflix, Inc. (NASDAQ:NFLX) was the subject of immense criticism when the giant streaming network decided to increase its subscription fees. The Street had feared that such a move would scare subscribers but not according to Janney Capital managing director, Tony Wible. During an interview on CNBC, Wible reiterated that Netflix’s subscriptions have only been increasing at the back of massive investments as the company seeks to fend off competition especially from Amazon.com, Inc. (NASDAQ:AMZN) on content offering.
The video streaming business is turning out to be immensely competitive with the entry of more players as more people yearn to watch content online while on the go. The analyst believes Netflix, Inc. (NASDAQ:NFLX) continues to maintain a competitive advantage because of its increased investments in the space.
“The company has been pretty consistent about what it is spending every single month on its subscribers and we think the subscriber base just continues to grow around the globe. I think what people really don’t appreciate what give us confidence that you are going to see a $5 billion spend is that, that is the competitive advantage,” said Mr. Wible
The competitive advantage on massive investments according to Wible is Netflix trying to make it extremely difficult for other players to sustain their business model in the space. Netflix, Inc. (NASDAQ:NFLX) is the highest spender online followed by Amazon.com, Inc. (NASDAQ:AMZN), but it is the streaming giant according to Wible that is attaining value from its investments.
Netflix has already had a disruptive effect on the tradition TV ecosystem as more people continue to make a switch into watching content online. Despite Amazon.com, Inc. (NASDAQ:AMZN) attaining substantial gains with its prime membership, Wible believes the ongoing battle is between Netflix, Inc. (NASDAQ:NFLX) and the traditional cable content providers.
“It is Netflix versus tradition in the sense that since 2010 we kind of flipped and said the traditional TV ecosystem has its issues because of Netflix, and I think traditional TV woes actually helped Netflix out. I think Amazon.com, Inc. (NASDAQ:AMZN) and Netflix, Inc. (NASDAQ:NFLX) can both survive but around the globe I think Netflix is going to dominate the market,” said Mr. Wible.
Content fees are already rising mostly as a result of Netflix, Inc. (NASDAQ:NFLX)’s investments in the space something that Wible believes will continue giving the company an edge in the content streaming business worldwide.
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