You Either Love Netflix Inc. (NFLX) or You Hate It

If Netflix didn’t go this route — more than doubling its revenue in three years, I might add — someone else would’ve done it and Netflix would be on the wrong side of growth and media consumption.

Amazon.com, Inc. (NASDAQ:AMZN) rolled out the Kindle just as Netflix started streaming and it went on to corner the e-reader market that would disrupt its original physical books business. Margins also have taken a hit as it battles for market share.

This is the same story at Netflix Inc. (NASDAQ:NFLX), and now that Amazon is bending over backwards to matter in digital video streaming, it’s too late. Netflix has more than 33 million streaming subscribers worldwide, and it can therefore afford to spend more on digital content than anybody else.

You have to pity Coinstar, Inc. (NASDAQ:CSTR) that waited until now — and really not even “now” since Redbox Instant is still in private beta — to learn what Netflix did six years ago.

Bears will be bears
Pachter argues that all that Netflix did was surprise investors with a small profit during the holiday quarter after keeping costs in check.

“I don’t get how investors think that one-time tweaking of their spending is worth $5 billion,” he says. “Nothing changed.”

It’s not that.

The shares were already rallying for months before January’s quarterly report, and it wasn’t just about the bottom line. Subscriber growth was off the charts. Netflix’s outlook was upbeat, and this current quarter should mark the first time that Netflix’s domestic streaming business tops DVDs in contribution profit.

Netflix Inc. (NASDAQ:NFLX) isn’t perfect, and bulls need to know that. However, Netflix also isn’t broken, and that’s something that bears seem to miss.

The article You Either Love Netflix or You Hate It originally appeared on Fool.com and is written by Rick Aristotle Munarriz.

Longtime Fool contributor Rick Aristotle Munarriz owns shares of Netflix. The Motley Fool recommends Amazon.com and Netflix. The Motley Fool owns shares of Amazon.com and Netflix.

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