Netflix, Inc. (NASDAQ:NFLX) continues to climb higher in terms of subscribers, and the company has ramped up content spending to match the demand. However, some critics believe the streaming giant could fall into a quantity over quality trap.
CNN Money shares what the critics have to say about Netflix.
There’s room to wonder, however, if the streaming service’s strategy is beginning to yield diminishing returns — and specifically, whether the sheer volume of its original programming is growing beyond what Netflix (NFLX) can effectively market. If the service once showcased new programs, today one is as apt to stumble upon them as much out of serendipity as by virtue of its promotional efforts.
Notably, two key rivals, the Walt Disney (DIS) Co. and HBO, have recently seized on this line of attack, suggesting that Netflix’s reliance on churning out originals is potentially an Achilles heel, or at least, a point of differentiation that they can effectively counter in a quality-versus-quantity manner.
Disney CEO Bob Iger addressed Wall Street analysts last month, and he noted that his company “will not necessarily go in the volume direction that Netflix has gone” when Disney’s streaming service launches next year. HBO programming president Casey Bloys has thrown shade on Netflix attracting talent from across the industry by noting that they may not receive the attention they’re accustomed to by joining Netflix’s vast lineup.
The constant debuts of new content can also be a pain for entertainment journalists to keep on top of and draw attention to, but that falls into the bucket of good inconveniences to have to deal with.
Netflix, Inc. shares fell $4.21 (-1.33%) in premarket trading Thursday. Year-to-date, NFLX has gained 62.34%, versus a 0.74% rise in the benchmark S&P 500 index during the same period.